Consider a Simple Linear Regression Model, Y = β₀+ β₁x

question 30

Multiple Choice

Consider a simple linear regression model, y = β₀+ β₁x + u, . What does the zero conditional mean assumption imply?

• A)The expected value of the error term, u , is zero, regardless of what the value of the explanatory variable, x, is.
• B)The estimated average value of β₁ is zero.
• C)The expected value of the explained variable, y , is zero, regardless of what the value of the explanatory variable, x , is.
• D)The estimated average value of β₀ is zero.

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Definitions:

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