You can control for a potential time-trend in your data by
A)not including spuriously correlated variables in your regression.
B)including dummy variables for three of the four quarters in your regression.
C)de-trending the data before performing OLS.
D)performing weighted least squares by diving the initial data by the estimate coefficient on the time-trend variable.

Question

Quizplus · Accepted Answer

De-trending the data before performing OLS is the best choice to control for a potential time-trend in the data. This involves removing the linear trend from the data by fitting a regression model to the time series of interest, and estimating the residuals of this model. The resulting residuals are then used for further analysis, such as OLS regression. This method allows for the effects of time to be removed from the data, thus eliminating potential confounding inferences due to time-trends.

You Can Control for a Potential Time-Trend in Your Data