Autocorrelation occurs when
A)an omitted independent variable is correlated with the error term.
B)the error term is correlated across different time-periods.
C)the error term has a non-constant variance.
D)the error term is,on average,equal to zero.

Question

Quizplus · Accepted Answer

Autocorrelation occurs when the error term is correlated across different time-periods. This means that the error in one period is related to the error in another period, violating the assumption of independence.

Autocorrelation Occurs When