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:

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