Multiple Choice
Which of the following assumptions is needed for the plug-in solution to the omitted variables problem to provide consistent estimators?
A) The error term in the regression model exhibits heteroskedasticity.
B) The error term in the regression model is uncorrelated with all the independent variables.
C) The proxy variable is uncorrelated with the dependent variable.
D) The proxy variable has zero conditional mean.
Correct Answer:
Verified
Correct Answer:
Verified
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