Consider a Simple Linear Regression Model, Wage =

question 7

Multiple Choice

Consider a simple linear regression model, wage = + male + u, where male is a binary variable (1 if a person is male, and 0 otherwise) . Now suppose that we know being a male means there is a lower probability of attaining higher education, another factor that is also expected to affect wage. Which of the key assumptions made to establish unbiasedness of OLS estimates do not hold?

• A)Linear in parameters
• B)Random sampling
• C)Sample variation in the explanatory variable
• D)Zero conditional mean

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