Suppose the variable x₂ has been omitted from the following regression equation, y = B₁ + B₁x1 + B₂x2 + u. Let ₁ represent the slope estimate obtained when X₂ is omitted from the equation. The bias in B₁ is negative if O B₂ >0 and X₁ and x2 are positively correlated. O B₂ <0 and X₁ and x2 are positively correlated. O B₂=0 and X₁ and x2 are positively correlated. O B₂=0 and X₁ and x2 are negatively correlated.

Suppose the variable x₂ has been omitted from the following regression equation, y = B₁ + B₁x1 + B₂x2 + u. Let ₁ represent the slope estimate obtained when X₂ is omitted from the equation. The bias in B₁ is negative if O B₂ >0 and X₁ and x2 are positively correlated. O B₂ <0 and X₁ and x2 are positively correlated. O B₂=0 and X₁ and x2 are positively correlated. O B₂=0 and X₁ and x2 are negatively correlated.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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