Question 3 [2|] Marks} Let M, denote the savings of household g' and m denote its income during the last period. A simple regression of m on m is SAVL-Ii = 3., + 31mg + at a) Explain whyr we need the disturbance lul- {2 I'darlrs) b) What factors could be contained in the disturbance? {4 iMarlrs) c) List at least two possible factors liker to be correlated with the income variableINCi? [If the\").r are correlated, what problem does the OLE estimation of the above simple regression have? {8 IMarks) d) Explain how to correct the estimation problem in {c}. {E IMarks)