Which of the Following Assumptions Is Needed for the Plug-In

question 6

Multiple Choice

Which of the following assumptions is needed for the plug-in solution to the omitted variables problem to provide consistent estimators?

• A)The error term in the regression model exhibits heteroskedasticity.
• B)The error term in the regression model is uncorrelated with all the independent variables.
• C)The proxy variable is uncorrelated with the dependent variable.
• D)The proxy variable has zero conditional mean.

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Definitions:

Millivolts

A unit of electric potential or electromotive force equal to one thousandth of a volt, commonly used in measuring electrical potentials in cells and batteries.

Neuron

A specialized cell transmitting nerve impulses; a nerve cell.

Reflexes

Involuntary and nearly instantaneous movements in response to stimuli, as part of the body's protective mechanism.

Medulla Oblongata

The lowest section of the brainstem, controlling autonomic functions such as breathing and heart rate.