In the Case of the Simple Regression Model $Y _ { i } = \beta _ { 0 } + \beta _ { 1 } X _ { i } + u _ { i } , i = 1 , \ldots , n$

question 4

Multiple Choice

In the case of the simple regression model $Y _ { i } = \beta _ { 0 } + \beta _ { 1 } X _ { i } + u _ { i } , i = 1 , \ldots , n$ when X and u are correlated, then

• A) the OLS estimator is biased in small samples only.
• B) OLS and TSLS produce the same estimate.
• C) X is exogenous.
• D) the OLS estimator is inconsistent.

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Definitions:

Expand

To expand an algebraic expression means to multiply it out or remove parentheses, simplifying it to a sum or difference of terms.

Properties

Characteristics or attributes that help define mathematical operations or objects, such as commutative, associative, and distributive properties for addition and multiplication.

Logarithms

The inverse operation to exponentiation, indicating the power to which a base must be raised to obtain a particular number.

Expand

To express a mathematical expression in an extended form by distributing or applying operations within the expression.