Errors-In-Variables Bias
A)is Present When the Probability Limit of the OLS

question 47

Multiple Choice

Errors-in-variables bias

• A)is present when the probability limit of the OLS estimator is given by \(\hat { \beta } _ { 1 }\stackrel { p } { \longrightarrow }
• \beta _ { 1 } + \frac { \sigma _ { x } ^ { 2 } } { \sigma _ { x } ^ { 2 } + \sigma _ { w } ^ { 2 } }\)
• B)arises when an independent variable is measured imprecisely.
• C)arises when the dependent variable is measured imprecisely.
• D)always occurs in economics since economic data is never precisely measured.

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Definitions:

Affective Forecasting

The process of predicting how one would feel in response to future emotional events.

Low Grade

A term often used in education and medicine indicating a performance, quality, or condition that is below average or minimum accepted standards.

High Grade

A term indicating a level of superior quality or performance, often used in educational or professional contexts to denote excellence.

Loss Aversion

A cognitive bias that describes how the pain of losing is psychologically more powerful than the pleasure of gaining.