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The residual sum of squares (RSS) measures the variance of residual terms in linear regressions. Now consider the two types of models we covered in

The residual sum of squares (RSS) measures the variance of residual terms in linear regressions. Now consider the two types of models we covered in class, e.g. the unrestricted model and restricted model: for instance:

yt = b1 + b2x2t + b3x3t + b4x4t+ ut

yt = b1 + b2x2t + ut

the first one is the unrestricted model and the second one is the restricted model under the restriction of 3 = 4 = 0. Without any calculation, which do you expect to be bigger: the RSS of unrestricted model or the RSS of restricted model? Why?

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