Suppose the first assumption is replaced with E(u;X;) = 2. What happens to E(Y,IX;)? O A. The slope B₁ changes to B₁ +2. OB. Nothing changes. O C. Both the intercept and the slope ₁ change to Bo +2 and ₁ + 2 respectively. OD. The intercepto changes to Bo +2. Are the rest of the OLS assumptions satisfied? O A. Both OLS assumptions (2) and (3) are satisfied. OB. OLS assumption (3) is satisfied but not (2). O C. Neither OLS assumption (2) nor (3) is satisfied. O D. OLS assumption (2) is satisfied but not (3).

Calculus For The Life Sciences
2nd Edition
ISBN:9780321964038
Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Chapter2: Exponential, Logarithmic, And Trigonometric Functions
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The Least Squares Assumptions
1. The error term u; has conditional mean zero given X;: E (u;IX;) = 0;
2. (X₁, Y₁),i= 1,..., n, are independent and identically distributed (i.i.d.) draws from their joint distribution; and
3. Large outliers are unlikely: X, and Y; have nonzero finite fourth moments.
Suppose the first assumption is replaced with E(u;X;) = 2. What happens to E(Y;IX;)?
O A. The slope ₁ changes to B₁ +2.
O B.
Nothing changes.
O C. Both the intercept o and the slope ₁ change to po +2 and ₁ + 2 respectively.
O D. The intercept Bo changes to Bo + 2.
Are the rest of the OLS assumptions satisfied?
A. Both OLS assumptions (2) and (3) are satisfied.
B. OLS assumption (3) is satisfied but not (2).
C. Neither OLS assumption (2) nor (3) is satisfied.
O D. OLS assumption (2) is satisfied but not (3).
Y₁ =B₁ + Box; + U₁₁ i = 1,..., n, where
។
Transcribed Image Text:The Least Squares Assumptions 1. The error term u; has conditional mean zero given X;: E (u;IX;) = 0; 2. (X₁, Y₁),i= 1,..., n, are independent and identically distributed (i.i.d.) draws from their joint distribution; and 3. Large outliers are unlikely: X, and Y; have nonzero finite fourth moments. Suppose the first assumption is replaced with E(u;X;) = 2. What happens to E(Y;IX;)? O A. The slope ₁ changes to B₁ +2. O B. Nothing changes. O C. Both the intercept o and the slope ₁ change to po +2 and ₁ + 2 respectively. O D. The intercept Bo changes to Bo + 2. Are the rest of the OLS assumptions satisfied? A. Both OLS assumptions (2) and (3) are satisfied. B. OLS assumption (3) is satisfied but not (2). C. Neither OLS assumption (2) nor (3) is satisfied. O D. OLS assumption (2) is satisfied but not (3). Y₁ =B₁ + Box; + U₁₁ i = 1,..., n, where ។
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