When you have an omitted variable problem, the assumption that E(ui Xi) = 0 is violated. This implies that
A) the sum of the residuals is no longer zero.
B) there is another estimator called weighted least squares, which is BLUE.
C) the sum of the residuals times any of the explanatory variables is no longer zero.
D) the OLS estimator is no longer consistent.
Answer: D) the OLS estimator is no longer consistent.
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A scenario plan is different from business plan because:
a. A scenario plan focuses on business cash flows, and a business plan focuses mainly on strategy. b. Business plans are for long periods of time, and scenario plans are for short periods, like capital budgeting projects. c. A scenario plan is long term and focuses on industry, demographic, industry, and social trends. Business plans are short-term and focus mainly on cash flows and relatively short-term strategies. d. Business plans are usually for one-year and two year periods. Scenario plans are medium term, with time horizons of three to five years. e. Scenario plans tend to focus on long-term marketing strategies and the proper handling of non-operating assets (e.g., marketable security holdings). Business plans focus more on mergers and acquisitions and the proper lines of business in which a company should be involved.
The balance of trade identity says the current account is equal to ________.
A. the reserve account B. 100 C. zero D. the sum of the capital account and the financial account