Question: Note that in Table 1.6 some subsample averages are closer to the corresponding fitted regression values than others. 1. Explain why this is reasonable in

Note that in Table 1.6 some subsample averages are closer to the corresponding fitted regression values than others.

1. Explain why this is reasonable in light of the number of observations in each cell.

2. Describe a set of RHS variables that would provide OLS fitted values equal to the subsample averages.

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