Suppose the conditional mean function isY = Bo + BiX + B2X² + B3X3 + U%3Dwhere E[U]X]3D0. By mistake, a researcher omitted X^2 and X^3 terms in theregression and ran regression of Y on X and an intercept only. It turns out thatcovariance between X and B2X2 + B3X° is nonzero. Is the OLS estimatorresearcher computed consistent for beta 1?Yes, since the omitted variables are just functions of X.Yes, since the covariance between X and B2X2 + B3X is nonzeroNo, since the covariance between X and B2X4 + B3X° is nonzeroNo, since the omitted variables are negligibly small.

Answered: Image /qna-images/answer/6926eee4-e345-4af7-9e66-22f0e5e02592.jpg

Answered: Suppose the conditional mean function…

Algebra & Trigonometry with Analytic Geometry

13th Edition

ISBN:9781133382119

Author:Swokowski

Publisher:Swokowski

Chapter7: Analytic Trigonometry

Section7.6: The Inverse Trigonometric Functions

Problem 91E

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