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:

Subliminal Persuasion

A technique of influencing people's thoughts, feelings, or actions with messages that are below the threshold of conscious perception.

Subliminal Stimuli

Stimuli that are below the threshold of conscious perception but can influence thoughts, feelings, or actions.

Conscious Awareness

The state of being aware of and able to think about one's own existence, sensations, thoughts, surroundings, and experiences.

Subliminal Perception

The processing of information by the brain that occurs below the level of conscious awareness.