7. Suppose a population regression model is: Y; = Bo + B1X; + u¿. Yi, X¡, and u¡ denote the dependent variable, independent variable, and the error term, respectively. i indexes each individual observation. Bo and ß, are the OLS estimators, and û¡ is the regression residual, using a sample of n observations. Which of the following statement is false? %3D a. E7 û; = 0. b. E7 û;X{ = 0. c. Suppose E(u¡|X;) # 0 and the correlation between X and u̟ is zero. Then, the OLS estimator B, is inconsistent. %3D d. The assumption that the correlation between X¡ and u¡ is zero cannot be tested empirically. e. None of the above choices (a)-(d).
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
Statistics
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