MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN: 9781119256830
Author: Amos Gilat
Publisher: John Wiley & Sons Inc
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If the true model is given by
y=Bo+B1X1+B2X2+ɛ
but we omit X2 then
Select one:
Oa.
None of the above
O b. the forecast of y will be biased
O c. if X1 and X2 are uncorrelated, the t statistic for testing B1=0 from the model with omitted variables is likely to be larger in absolute value than that from the true model
O d. the estimated B1 will be biased
if X1 and X2 are uncorrelated, the s.e. of estimated B, with omitted variables will be smaller than the s.e. of estimated B, with the true model
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Transcribed Image Text:If the true model is given by y=Bo+B1X1+B2X2+ɛ but we omit X2 then Select one: Oa. None of the above O b. the forecast of y will be biased O c. if X1 and X2 are uncorrelated, the t statistic for testing B1=0 from the model with omitted variables is likely to be larger in absolute value than that from the true model O d. the estimated B1 will be biased if X1 and X2 are uncorrelated, the s.e. of estimated B, with omitted variables will be smaller than the s.e. of estimated B, with the true model
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