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Show that E[ ut | Income, ] Show that Var[u | Income] = o² Income, • Explain why this model does not comply with the Gauss-Markov assumptions

Show that E[ ut | Income, ] Show that Var[u | Income] = o² Income, • Explain why this model does not comply with the Gauss-Markov assumptions

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Consider the following consumer function an answer: 

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Consider the following consumer function: сonsumption, %3D В1 + Bzlncomе, + u, Uz = VIncome,t Vt Vz ~ (0, o²) Show that E[ U, | Income,] Show that Var[ u; | Income, ] = o² Income, • Explain why this model does not comply with the Gauss-Markov assumptions
Transcribed Image Text:Consider the following consumer function: сonsumption, %3D В1 + Bzlncomе, + u, Uz = VIncome,t Vt Vz ~ (0, o²) Show that E[ U, | Income,] Show that Var[ u; | Income, ] = o² Income, • Explain why this model does not comply with the Gauss-Markov assumptions
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