QUESTION 1Which one of the following assumptions is known as the spherical disturbance assumption?E(uu') = 0E(uu') = XXxy1E(uu') ==o²xyE(uu') = a2All of the above.None of the above.QUESTION 2If the error term covariance matrix is not spherical, but it is diagonal, then you have:O Autocorrelation, but no heteroskedasticity.O Heterskedasticity and autocorrelation.Heteroskedasticity, but no autocorrelation.Both heteroskedasticity and autocorrelation.Neither hetroskedasticity or autocorrelation.QUESTION 3Which one of the following statements is true for a linear regression model with non-spherical disturbances (i.e. E(uu') = Q):The GLS estimator is inefficient.The OLS estimator is inefficient.The OLS estimator covariance matrix is diagonal.The GLS estimator covariance matrix is block-diagonal.All of the above.None of the above.

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ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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QUESTION 1 Which one of the following assumptions is known as the spherical disturbance assumption? O Euu) - A E(uu') - XIXXy Etuu') = oxy E(uu') = a4 All of the above. None of the above.