Question: a. In the fixed effects regression model, are the fixed entity effects, a, con- sistently estimated as n with 7 fixed? (Hint: Analyze the model

a. In the fixed effects regression model, are the fixed entity effects,

a, con- sistently estimated as n with 7 fixed? (Hint: Analyze the model with no X's: Ya, + u;-)

b. If n is large (say, n = 2000) but 7 is small (say, 7 = 4), do you think that the estimated values of

a, are approximately normally distrib- uted? Why or why not? (Hint: Analyze the model Y = a,+u)

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