Suppose we omit X3 from the following in a bivariate model
Yi = 0 + 1X1i + 2X2i + i
And suppose each of the independent variables is completely uncorrelated with the other independent variables (i.e., they have been randomly chosen in a randomized experiment) . What is the consequence of omitting X3 on 1hat?
A) No effect; 1hat will be unbiased.
B) 1hat will be biased toward zero.
C) 1hat will be more positive than it should be.
D) 1hat will be less positive than it should be.
Correct Answer:
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