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Suppose Yi= 0+ 1Xi+ui, where (Xi, ui) are i.i.d. and Xi is a Bernoulli random variable with Pr X=1 = . 2. When X=1, ui

Suppose Yi= 0+ 1Xi+ui, where (Xi, ui) are i.i.d. and Xi is a Bernoulli random variable with Pr X=1 = . 2. When X=1, ui is N(0, 4); when X=0, ui is N(0, 1). Show that the least squares assumptions for causal inference are satisfied.

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