Question 16: Consider two bivariate models you are estimating both described by: Y, = Bo + B,X+u. Pretend we magically know the value of the true errors for both of these models. The following charts graph the true errors with respect to X for the two models, model 1 and model 2. Model 1 Model 2 20000 30000 20000 10000 10000 方 -10000 -10000 -20000 -20000 30000 X Which of the following is true? You can select more than one. a. E(uX) 0 for both models b. E(u) = 0 for both models c. E(BX) = B, for both models d. E(BX) = B, for model 2 e. E(Bx) = B, for model 1 f. Cov(X, u) <0 for model 1 g. Cov(X, u) < 0 for model 2 h. Cov(X,u) > 0 for model 1 1. Cov(X, u) > 0 for model 2 j. Cov(X, u) = 0 for model 1 k. Cov(X, u) = 0 for model 2 %3D !! %3D %3!

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Question 16: Consider two bivariate models you are estimating both described by: Y, = Bo +
B,X + u. Pretend we magically know the value of the true errors for both of these models. The
following charts graph the true errors with respect to X for the two models, model 1 and model
2.
Model 1
Model 2
20000
30000
20000
10000
10000
-10000
-10000
-20000
-20000
-30000
Which of the following is true? You can select more than one.
a. E(uX) = 0 for both models
b. E(u) = 0 for both models
c. E(BX) = B, for both models
d. E(BX) = Bi for model 2
e. E(B,x) = B, for model 1
f. Cov (X, u) < 0 for model 1
g. Cov(X, u) < 0 for model 2
h. Cov(X, u) > 0 for model 1
i. Cov(X, u) > 0 for model 2
j. Cov(X, u) = 0 for model 1
k. Cov(X, u) = 0 for model 2
%3D
%3D
%3D
253
EBS
946
Transcribed Image Text:Question 16: Consider two bivariate models you are estimating both described by: Y, = Bo + B,X + u. Pretend we magically know the value of the true errors for both of these models. The following charts graph the true errors with respect to X for the two models, model 1 and model 2. Model 1 Model 2 20000 30000 20000 10000 10000 -10000 -10000 -20000 -20000 -30000 Which of the following is true? You can select more than one. a. E(uX) = 0 for both models b. E(u) = 0 for both models c. E(BX) = B, for both models d. E(BX) = Bi for model 2 e. E(B,x) = B, for model 1 f. Cov (X, u) < 0 for model 1 g. Cov(X, u) < 0 for model 2 h. Cov(X, u) > 0 for model 1 i. Cov(X, u) > 0 for model 2 j. Cov(X, u) = 0 for model 1 k. Cov(X, u) = 0 for model 2 %3D %3D %3D 253 EBS 946
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