Suppose the true population model of y is given by y=Bo+B1X1+B2x2+B3X3+u. Which of the following will...

 

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Suppose the true population model of y is given by y=Bo+B1X1+B2x2+B3X3+u. Which of the following will lead to a higher variance of the OLS estimator on x3? (i) A smaller sample size. (ii) Greater variation in x3 (iii) Greater variation in u (iv) Higher correlation between xị and x2 (v) Higher correlation between x1 and x3 A. (ii) and (v) only B. (i), (iii) and (v) only C. (i), (ii), (iii), and (v) only D. (i), (ii), (iii), (iv), and (v) Suppose the true population model of y is given by y=Bo+B1X1+B2x2+B3X3+u. Which of the following will lead to a higher variance of the OLS estimator on x3? (i) A smaller sample size. (ii) Greater variation in x3 (iii) Greater variation in u (iv) Higher correlation between xị and x2 (v) Higher correlation between x1 and x3 A. (ii) and (v) only B. (i), (iii) and (v) only C. (i), (ii), (iii), and (v) only D. (i), (ii), (iii), (iv), and (v)

Answer rating: 100% (QA)

The correct option is C Explation ii iii A Sm... View the full answer