13. For this question, you should read both of the statements below and, for both statements, you should do the following: (a) identify what CLRM assumption is being violated; (b) state what affect it has (if any) on the coefficient parameters being estimated; (c) what affect it has (if any) on the standard errors; (d) what affect it has (if any) on the test statistics; and, (e) state how we identify and correct this violation of the CLRM assumption.

Statement 1: Relevant variables are not being included in the regression.

Statement 2: The error variance is not constant and is related to the level (or value) of the independent variable.