Question: Consider the DGP y = + + 2X2+ where E[E] = E[sxl) = ECEX2) O_ Suppose you ignore the distribution of the error term

Consider the DGP y = + + 2X2+ where E[E] = E[sxl) = ECEX2) O_ Suppose you ignore the distribution of the error term and you have access to the data set {y, to estimate dlls model. a) b) c) d) Construct the equations that characterize the method of moments estimators for the parameters 130, L, and 132. Explain how you would construct the confidence mterval for 131. Add any assumptions you find necessary to achieve this. Explain how you would test Ho: L = O_ Add any assumptions you find necessary to construct this test. d) Assume you estimate that 131 = O. Interpret this result

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