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In the Following Determining Function, Earningsi = α0 + α1Educationi

Question 42

Multiple Choice

In the following determining function, Earningsi = α0 + α1Educationi + Ui, what might be a factor contained in Ui?


A) Predictions of earnings
B) Innate ability, which might be correlated with education and earnings
C) Proximity to a 4-year college, which is known to not impact earnings
D) Heteroscedasticity

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