In a multiple regression model X1 and X2 are two independent variables and the assumption is made that the effect of of X1 and X2 on dependent variables is independent of each other.For example let y be the student grade and x1 is the study hour and x2 be the IQ level of student so the multiple regression model for this scenario will be
Y=b0+b1x1+b2x2+e
Hence we can see that effect of study hour and IQ level on the student grade and the effect of study hour on the student grade is independent of the value of IQ level.
