Your classmate has been asked to do a research project. She considers investigating the effect of income on savings among Canadians. You say that you are worried about her project because savings usually yield interest, so that higher savings should lead to higher income. What problem are you describing? Classical measurement error in the regressor Classical measurement error in the dependent variable ONonclassical measurement error Simultaneous causality

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Question 13
Your classmate has been asked to do a research project. She considers investigating
the effect of income on savings among Canadians. You say that you are worried
about her project because savings usually yield interest, so that higher savings should
lead to higher income. What problem are you describing?
Classical measurement error in the regressor
Classical measurement error in the dependent variable
Nonclassical measurement error
Simultaneous causality
Transcribed Image Text:Question 13 Your classmate has been asked to do a research project. She considers investigating the effect of income on savings among Canadians. You say that you are worried about her project because savings usually yield interest, so that higher savings should lead to higher income. What problem are you describing? Classical measurement error in the regressor Classical measurement error in the dependent variable Nonclassical measurement error Simultaneous causality
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