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Consider the Following Regression Model: Log(y) = 0

Question 4

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Consider the following regression model: log(y) = Consider the following regression model: log(y) = 0 + <sub>1</sub>x<sub>1</sub> + <sub>2</sub>x<sub>1</sub><sup>2</sup> + <sub>3</sub>x<sub>3</sub> + u. This model will suffer from functional form misspecification if _____. A) <sub>0</sub> is omitted from the model B) u is heteroskedastic C) x<sub>1</sub><sup>2</sup> is omitted from the model D) x<sub>3</sub> is a binary variable 0 + Consider the following regression model: log(y) = 0 + <sub>1</sub>x<sub>1</sub> + <sub>2</sub>x<sub>1</sub><sup>2</sup> + <sub>3</sub>x<sub>3</sub> + u. This model will suffer from functional form misspecification if _____. A) <sub>0</sub> is omitted from the model B) u is heteroskedastic C) x<sub>1</sub><sup>2</sup> is omitted from the model D) x<sub>3</sub> is a binary variable 1x1 + Consider the following regression model: log(y) = 0 + <sub>1</sub>x<sub>1</sub> + <sub>2</sub>x<sub>1</sub><sup>2</sup> + <sub>3</sub>x<sub>3</sub> + u. This model will suffer from functional form misspecification if _____. A) <sub>0</sub> is omitted from the model B) u is heteroskedastic C) x<sub>1</sub><sup>2</sup> is omitted from the model D) x<sub>3</sub> is a binary variable 2x12 + Consider the following regression model: log(y) = 0 + <sub>1</sub>x<sub>1</sub> + <sub>2</sub>x<sub>1</sub><sup>2</sup> + <sub>3</sub>x<sub>3</sub> + u. This model will suffer from functional form misspecification if _____. A) <sub>0</sub> is omitted from the model B) u is heteroskedastic C) x<sub>1</sub><sup>2</sup> is omitted from the model D) x<sub>3</sub> is a binary variable 3x3 + u. This model will suffer from functional form misspecification if _____.


A) Consider the following regression model: log(y) = 0 + <sub>1</sub>x<sub>1</sub> + <sub>2</sub>x<sub>1</sub><sup>2</sup> + <sub>3</sub>x<sub>3</sub> + u. This model will suffer from functional form misspecification if _____. A) <sub>0</sub> is omitted from the model B) u is heteroskedastic C) x<sub>1</sub><sup>2</sup> is omitted from the model D) x<sub>3</sub> is a binary variable 0 is omitted from the model
B) u is heteroskedastic
C) x12 is omitted from the model
D) x3 is a binary variable

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