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Consider a Situation Where Y Is Related to X in the Following

Question 33

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Consider a situation where Y is related to X in the following manner: Yi = β0 × Consider a situation where Y is related to X in the following manner: Yi = β0 × × eui.Draw the deterministic part of the above function.Next add,in the same graph,a hypothetical Y,X scatterplot of the actual observations.Assume that you have misspecified the functional form of the regression function and estimated the relationship between Y and X using a linear regression function.Add this linear regression function to your graph.Separately,show what the plot of the residuals against the X variable in your regression would look like. × eui.Draw the deterministic part of the above function.Next add,in the same graph,a hypothetical Y,X scatterplot of the actual observations.Assume that you have misspecified the functional form of the regression function and estimated the relationship between Y and X using a linear regression function.Add this linear regression function to your graph.Separately,show what the plot of the residuals against the X variable in your regression would look like.

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