Suppose the Variable X2 Has Been Omitted from the Following

question 12

Multiple Choice

Suppose the variable x2 has been omitted from the following regression equation, is the estimator obtained when is omitted from the equation. The bias in is positive if _____.

• A) >0 and and are positively correlated
• B) <0 and and are positively correlated
• C) >0 and and are negatively correlated
• D) = 0 and and are negatively correlated

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Definitions:

Rent

A regular payment made for the use of land, property, or equipment.

Opportunity Cost

The skipping of feasible improvements from various alternatives due to settling on one.

Own Savings

The portion of personal or household income that is not spent on consumption but is kept aside for future use, investments, or emergencies.

Economic Profit

The variance identified between overall proceeds and all-inclusive financial outgoings, inclusive of both explicit and veiled costs.