Question

QUESTION 19
True or False: Adding more independent variables into the model necessarily reduces bias.
True

False

2.5 points   

QUESTION 20
True or False: By adding more independent variables into our OLS model, we have a greater chance of getting rid of the endogeneity that exists within the error term.
True

False

2.5 points   

QUESTION 21
True or False: Given the model Income = β 0 + β 1 Parental income + β 2 Male where Male is a dummy variable, β 0=30,000, β 1=0.1, and β2=10,000, the expected income of a woman whose parents income is $60,000 is equal to $52,000.
True

False

Answer 1

Question 19 = False

By adding more independent variables into model neccessary not reduces bias

Because multicollinearity occurs when independent terms in regression model are correlated

Question 20 = True

It is true by adding more independent variables into our OLS model we have a greater chance of getting rid of endogeneity that exists within the error term

Question 21 = false

The above statement is false because the expected income is not equal to $52000

:)