Which of the Following Is True

question 1

Multiple Choice

Which of the following is true?

• A)A functional form misspecification can occur if the level of a variable is used when the logarithm is more appropriate.
• B)A functional form misspecification occurs only if a key variable is uncorrelated with the error term.
• C)A functional form misspecification does not lead to biasedness in the ordinary least squares estimators.
• D)A functional form misspecification does not lead to inconsistency in the ordinary least squares estimators.

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Definitions:

Objective Theory

A principle that states the intention of parties in a contract is determined by their outward expressions and acts, rather than by their subjective intentions.

Subjective Fact

A statement or idea based on personal opinions, interpretations, points of view, or emotions rather than on objective evidence.

Legally Binding

A contract or agreement that is enforceable by law, obligating parties to fulfill their commitments.

Bilateral Contract

A type of contract that arises when a promise is given in exchange for a promise.