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1. (6 points) Explain the consequence if you omit a relevant explanatory variable from a regression. 2. (19 points) Suppose that we want to
1. (6 points) Explain the consequence if you omit a relevant explanatory variable from a regression. 2. (19 points) Suppose that we want to estimate the effect of city credit ratings on the municipal bond interest rate (MBR) using dummy variables using the following regression model (Model 1):
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Introductory Econometrics A Modern Approach
Authors: Jeffrey M. Wooldridge
4th edition
978-0324581621, 324581629, 324660545, 978-0324660548
