THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 82

Essay

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
An economist is in the process of developing a model to predict the price of gold.She believes that the two most important variables are the price of a barrel of oil (x₁)and the interest rate (x₂).She proposes the model y = β₀ + β₁x₁ + β₂x₂ + β₃x₁x₃ + ε.A random sample of 20 daily observations was taken.The computer output is shown below.
THE REGRESSION EQUATION IS
y = 115.6 + 22.3x₁ + 14.7x₂ - 1.36x₁x₂

S = 20.9 R-Sq = 55.4%
ANALYSIS OF VARIANCE

-Suppose that the true linear model for a process was Y = β₀ + β₁X₁ + β₂X₂ + β₃X₃ and you incorrectly estimated the model y = α + α₁X₂.Discuss the bias that results from using the second model.

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Definitions:

Scene

In the context of visualization and perception, a scene refers to an image or environment that is the focus of attention.

Visual Losses

Impairments or reductions in the ability to see, ranging from slight vision loss to total blindness.

Prototype

An early sample, model, or release of a product built to test a concept or process or to act as a thing to be replicated or learned from.

Robin

A small, insectivorous bird often recognized by its bright red or orange breast.