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Statistics - Bivariate Regression

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(a) List two limitations of a bivariate regression. (b) Why is estimating a multiple regression model just as easy as bivariate regression?

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A complete, neat and step-by-step solution that lists two limitations of a bivariate regression as well as provides an answer to why estimating a multiple regression model is just as easy as a bivariate regression.

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(a) Limitations of Bivariate Regression:
(i) Linear regression is often inappropriately used to model non-linear relationships (due to lack in understanding when linear regression is applicable).
(ii) Linear regression is limited to predicting numeric outputs only. It gives no qualitative information.
(iii) It is meaningless to do a ...

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