Economics · Econometrics
In the linear regression model Yi = α + βXi + ei, if the covariance between the independent variable X and the error term e is not zero, then the Ordinary Least Squares (OLS) estimators are:
- 1biased and inconsistent✓
- 2biased but consistent
- 3unbiased but inconsistent
- 4impossible to calculate
Correct answer
biased and inconsistent
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