Errors-In-Variables Bias
A)is Present When the Probability Limit of the OLS

question 36

Multiple Choice

Errors-in-variables bias

• A)is present when the probability limit of the OLS estimator is given by
• \[\hat { \beta } _ { 1 } \rightarrow \beta _ { 1 } + \frac { \sigma _ { x } ^ { 2 } } { \sigma _ { x } ^ { 2 } + \sigma _ { w } ^ { 2 } }\]
• B)arises when an independent variable is measured imprecisely.
• C)arises when the dependent variable is measured imprecisely.
• D)always occurs in economics since economic data is never precisely measured.

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