Ordinary Least Squares Estimation Is Subject to Heterogeneity Bias If

question 2

Multiple Choice

Ordinary least squares estimation is subject to heterogeneity bias if _____.

• A)the regression model exhibits heteroskedasticty
• B)the unobserved effect is correlated with the observed explanatory variables
• C)the regression model includes a lagged dependent variable
• D)the explanatory variables do not change over time

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