Using the Model Y = Xβ + U, and the Extended

question 5

Essay

Using the model Y = Xβ + U, and the extended least squares assumptions, derive the OLS estimator $\hat {\beta}$ Discuss the conditions under which $X ^ { \prime }$ X is invertible.

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Definitions:

United States Treasury

The government department responsible for managing federal finances, including issuance of currency and management of government accounts.

Store Of Value

An asset that can be saved, retrieved, and exchanged at a later time, maintaining its value over time.

Checkable Deposits

are bank accounts that allow the account holder to write checks to third parties. Checkable deposits include checking accounts and are considered very liquid.

Reserves

Funds or physical resources set aside, often by businesses or governments, to meet future expenses, emergencies, or for specific purposes.