When an Error Term Is Added to an Economic Model

question 6

Multiple Choice

When an error term is added to an economic model and assumptions about the distribution of the error term are made,the resulting model is ______________.

• A)fallacious,you should not make assumptions about error terms.
• B)an econometric model that can be estimated and used for inference.
• C)misspecified due to missing information.
• D)heteroskedastic since error terms are no longer random.

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Definitions:

Gender Roles

The set of societal norms dictating what types of behaviors are generally considered acceptable, appropriate, or desirable for people based on their actual or perceived sex.

Heterosexuals

Individuals who are sexually attracted to people of the opposite sex.

Egalitarian

Pertaining to the belief in or practice of equal rights and opportunities for all people, often within a social, political, or economic context.

Decentralized

Refers to the distribution of decision-making powers and actions across various levels or locations in an organization or system, as opposed to central control.