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Suppose We Omit X3 from the Following in a Bivariate β\beta

Question 11

Multiple Choice

Suppose we omit X3 from the following in a bivariate model
Yi = β\beta 0 + β\beta 1X1i + β\beta 2X2i + ε\varepsilon 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 β\beta 1hat?


A) No effect; β\beta 1hat will be unbiased.
B) β\beta 1hat will be biased toward zero.
C) β\beta 1hat will be more positive than it should be.
D) β\beta 1hat will be less positive than it should be.

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