Omitted Variable Bias A $R ^ { 2 } < 1$

question 15

Short Answer

Omitted variable bias a. will always be present as long as the regression $R ^ { 2 } < 1$
b. is always there but is negligible in almost all economic examples
c. exists if the omitted variable is correlated with the included regressor but is not a determinant of the dependent variable
d. exists if the omitted variable is correlated with the included regressor and is a determinant of the dependent variable

---

Definitions:

Task Difficulty

Describes the level of challenge presented by a task, which can impact an individual's performance and effort required to complete it.

Attitude

A mental inclination characterized by the assessment of a specific entity in a manner that reflects either partiality or aversion.

Ability

The possession of the means or skill to perform a task or achieve an outcome, often acquired through practice or learning.

Self-Serving Bias

The common human tendency to attribute one's successes to personal factors while attributing failures to factors beyond one's control.