The Following Simple Model Is Used to Determine the Annual

question 22

Multiple Choice

The following simple model is used to determine the annual savings of an individual on the basis of his annual income and education. Savings = The variable 'Edu' takes a value of 1 if the person is educated and the variable 'Inc' measures the income of the individual.
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Refer to the model above. The inclusion of another binary variable in this model that takes a value of 1 if a person is uneducated, will give rise to the problem of _____.

• A)omitted variable bias
• B)self-selection
• C) dummy variable trap
• D) heteroskedastcity

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Definitions:

Heart Rate

The number of heartbeats per unit of time, typically expressed as beats per minute (BPM), indicating the heart's activity level and overall cardiovascular health.

Neurotransmitters

Chemical messengers that transmit signals across a chemical synapse, from one neuron (nerve cell) to another 'target' neuron, muscle cell, or gland cell.

Dopamine

Dopamine is a neurotransmitter in the brain that plays a key role in regulating mood, motivation, and reward.

Voluntary Movement

Movement that is consciously controlled by the brain, typically in response to a decision or desire to move a part of the body.