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    Question

    Ramsay retest is used

    for
    A Testing for stationarity in time series data. Correct Answer Incorrect Answer
    B Detecting heteroscedasticity in regression models. Correct Answer Incorrect Answer
    C Detecting omitted variables in regression models. Correct Answer Incorrect Answer
    D Checking for multicollinearity among independent variables. Correct Answer Incorrect Answer

    Solution

    The Ramsay RESET test is used for detecting omitted variables in regression models. It tests for general functional form misspecification by adding powers of the fitted values into the regression and checking if they are significant.

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