When You Have an Omitted Variable Problem, the Assumption That

question 17

Multiple Choice

When you have an omitted variable problem, the assumption that E(u_i X_i) = 0 is violated. This implies that

• A)the sum of the residuals is no longer zero.
• B)there is another estimator called weighted least squares, which is BLUE.
• C)the sum of the residuals times any of the explanatory variables is no longer zero.
• D)the OLS estimator is no longer consistent.

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Definitions:

Unbalanced Vane Pump

A type of rotary pump where uneven pressure on the pump vanes can lead to operational inefficiencies or damage.

Balanced Vane Pump

A type of hydraulic pump characterized by its design that balances the hydraulic forces to reduce wear and extend the pump's life.

Outlet Port

An exit point on a device or machine where substances (fluid or gas) are expelled or discharged.

Hydraulic Pump

A device that converts mechanical energy into hydraulic energy by forcing fluid from a reservoir into a hydraulic system.