Consider the following regression model where Suppose and are highly (but not perfectly) correlated. Then, a. b. C. d. e. OLS estimators are biased. OLS estimators are not consistent. OLS estimators will have large standard errors. One of,, or the constant should be dropped. cannot be interpreted as the population intercept.
Consider the following regression model where Suppose and are highly (but not perfectly) correlated. Then, a. b. C. d. e. OLS estimators are biased. OLS estimators are not consistent. OLS estimators will have large standard errors. One of,, or the constant should be dropped. cannot be interpreted as the population intercept.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Consider the following regression
model
where Suppose and are highly
(but not perfectly) correlated. Then,
a.
b.
C.
d.
e.
OLS estimators are biased.
OLS estimators are not
consistent.
OLS estimators will have large
standard errors.
One of,, or the constant
should be dropped.
cannot be interpreted as the
population intercept.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F66420785-c22f-4b65-b2f3-39a45f5ca4cc%2F97c2aa51-1178-4a25-9980-13a48f39db90%2Fbzzpjbv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider the following regression
model
where Suppose and are highly
(but not perfectly) correlated. Then,
a.
b.
C.
d.
e.
OLS estimators are biased.
OLS estimators are not
consistent.
OLS estimators will have large
standard errors.
One of,, or the constant
should be dropped.
cannot be interpreted as the
population intercept.
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