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The proper selection of factors to include in an ordinary least squares estimation is critical to the accuracy of the result. When does omitted variable bias occur?
A
Omitted variable bias occurs when the omitted variable is correlated with the included regressor and is a determinant of the dependent variable.
B
Omitted variable bias occurs when the omitted variable is correlated with the included regressor but is not a determinant of the dependent variable.
C
Omitted variable bias occurs when the omitted variable is independent of the included regressor and is a determinant of the dependent variable.
D
Omitted variable bias occurs when the omitted variable is independent of the included regressor but is not a determinant of the dependent variable.
