ECO 7405 Midterm: ECO 7405 FIU 03Test1
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Instructions: there are five questions in all, each having several parts. You will get more credit for precise answers and penalized for vague answers. Answers that do not directly address the question being asked but rather only provide some tangential information will not get any credit. As a general rule of thumb providing more details in an answer is better. Suppose the true regression model is y x. 3 3 v and the misspecified model is y x. Show whether or not the ols estimator of 2 from the mis-specified model is unbiased. In the case of the multiple regression model y x. 2 u the ols estimators of the slope coefficients are given by: If the regressors are perfectly correlated, i. e. if. , where a and b are constants, what do the ols estimators b. In the linear regression model x u y. What will be the estimates of the new.
