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Econ2300. Consider the following regression model Y=Bo+ B1X1+ B2X2+ u where E[ulX] , X2]= 0. Suppose X, and X, are highly (but not perfectly) correlated.

Econ2300.

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Consider the following regression model Y=Bo+ B1X1+ B2X2+ u where E[ulX] , X2]= 0. Suppose X, and X, are highly (but not perfectly) correlated. Then, Oa. OLS estimators are biased. O b. OLS estimators are not consistent. Oc. OLS estimators will have large standard errors. Od. One of X, , X,, or the constant should be dropped. e. B cannot be interpreted as the population intercept

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