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20 pts Please use the following passage to respond to the short answer questions below. Anna is interested in whether one's ethnicity is associated with

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20 pts Please use the following passage to respond to the short answer questions below. Anna is interested in whether one's ethnicity is associated with the level of income they earned during the year 2020. To test for this relationship, she runs a linear regression model using survey data with a nationally representative sample of U.S. adults. Her dependent variable, In(Income), is the natural log of the income a respondent earned during 2020 in U.S. dollars. Her independent variable, Ethnicity, denotes the ethnicity of the respondent and consists of five categories numbered 1 through 5: 1= White; 2=Black; 3=Hispanic; 4=Asian; and 5=Other. After estimating her model, she finds that the Ethnicity coefficient is positive and statistically significant at the 95% level. 1. Provide one justifiable reason why Anna took the natural log of Income. 2. What did Anna do wrong by using the Ethnicity variable in her model? Hint: Why is it incorrect to interpret ethnicity (measured as described) as significantly associated with income from the passage above? 3. Given your answer to #2, how would you correct Anna's mistake and test for whether one's ethnicity is associated with their level of earned income? For instance, how could you test for whether white Americans earned more income on average than black Americans or Hispanic Americans? Edit View Insert Format Tools Table 12pt Paragraph BIUA LV TV EV GV DV

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