Economic

You model the relationship between citizens' consumption and their monthly income. Based on your experience, you know that people with lower income usually spend 60% of their income on consumption. For people with higher income. some may spend only 40% on consumption. while others spend mas on consumption. What is the potential problem when you use a linear regression model? E[u|a:] 79 U Heteroskedasticity Perfect colinearity No variability in it None of above