Question: 1.4 Consider the following regression model: yi = B1 + B2xi + ui where xi and yi are as defi ned in Exercise 1.3. Show

1.4 Consider the following regression model: yi = B1 + B2xi + ui where xi and yi are as defi ned in Exercise 1.3. Show that in this model b1 = 0. What is the advantage of this model over the model in Exercise 1.3?

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