Question

If Xit is correlated with Xis for different values of s and t, then:________

a. Xit is said to be autocorrelated
b. the OLS estimator cannot be computed
c. statistical inference cannot proceed in a standard way even if clustered standard errors are used
d. this is not of practical importance since these correlations are typically weak in applications

Answer 1

Answer:

a. Xit is said to be autocorrelated

Explanation:

Correlation is the mutual connection between two or more variables. These variables can be dependent or independent but there should be random variables. When there is correlation of Xit with Xis then values of s and t are said to be auto correlated since there is relation existing between them.