E(u_i | X_i)= 0 Says That

question 58

Multiple Choice

E(u_i | X_i) = 0 says that

• A)dividing the error by the explanatory variable results in a zero (on average).
• B)the sample regression function residuals are unrelated to the explanatory variable.
• C)the sample mean of the Xs is much larger than the sample mean of the errors.
• D)the conditional distribution of the error given the explanatory variable has a zero mean.

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Definitions:

Benchmarking

The act of evaluating one's business operations and performance indicators against the industry's highest standards or the exemplary practices of other organizations.

Planning Technique

A method or approach used in the formulation of plans to achieve desired outcomes or objectives.

Verifiable Work

Tasks or projects that can be substantiated or confirmed, often relevant in contexts where proof of performance or achievement is required.