Answer Happy

Question 3 Consider the linear function y; -= Bo + Bixi + u₁. Suppose that the following results were obtained from a sample with 12 observations: ● Sample average of y = 10 ● Sample average of x = 10 ● Sample variance of y = 25 • Sample variance of x = 40 • Sample covariance of y and x = 20. Suppose that the CLM Assumptions hold here and answer the following questions. (iv) Suppose that we add the term ß₂z to the original model and that x and z are negatively correlated. What is the likely bias in estimates of ₁ obtained from the simple regression of y on x?