)How can you estimate non-linear function forms using least squares?
A)estimate the linear approximation over small ranges at a time
B)transform,such as squaring or cubing,some explanatory variables.
C)use a very large sample so you do not have to assume the error terms are normally distributed
D)It cannot be done.You need to use another estimation technique.

Question

Quizplus · Accepted Answer

To estimate non-linear function forms using least squares, one can transform some explanatory variables by squaring or cubing them, so that the resulting function is linear. This allows us to use the least squares formula to estimate the coefficients of the transformed variables.

)How Can You Estimate Non-Linear Function Forms Using Least Squares