1. If the personal tax exemption is determined by strong economic growth, and during times of strong economic growth fertility increases, will our resulting OLS estimates be unbiased or biased? Prove your answer.

2. You are interested in better understanding fertility and think it is related to climate change, specifically temperatures. You therefore consider the model: . Review required assumptions for unbiasedness, variance, and hypothesis testing with OLS estimators. What do you conclude for each assumption and your OLS estimator?