In a two regressor regression model, if you exclude one of the relevant variables then
A) it is no longer reasonable to assume that the errors are homoskedastic.
B) OLS is no longer unbiased, but still consistent.
C) you are no longer controlling for the influence of the other variable.
D) the OLS estimator no longer exists.
Ans: C) you are no longer controlling for the influence of the other variable.
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In the above figure, the deadweight loss due to the tax is
A) $1,000. B) $2,000. C) $4,000. D) $8,000.
Empirical evidence that changes in monetary policy do not cause rapid price adjustments ________
A) is consistent with the Keynesian emphasis on short-run economic fluctuations B) suggests that policymakers need not worry much about inflation C) remains limited and unconvincing D) is consistent with the classical dichotomy E) none of the above