1. You are interested the causal effect of X on Y, B1. Suppose that X, and X2 are uncorrelated.You estimate B1 by regressing Y onto X1 (so that X2 is not included in the regression). Doesthis estimator suffer from omitted variable bias due to the exclusion of X2?(a) Yes(b) No(c) Maybe2. Omitted variable bias violates which of the following assumptions:(a) The conditional distribution of u, given X1i X2i, ...Xki has a mean of zero(b) (Xi, X2i...Y;), i = 1, ., n are independently and identically distributed(c) Heteroskedasticity(d) Perfect multicollinearity

Regression analysis is one of the effective tools used by the researchers to measure the correlation…

Answered: 1. You are interested the causal effect…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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