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(Solved): Consider the following simple unobserved effects regression model for each i: yit=0+1xit1+. . . ...



Consider the following simple unobserved effects regression model for each i: yit=?0+?1xit1+. . .+?kxitk+ai+uit where yit = value of the dependent variable for individual i at time txit1, . . . , xitk = values of the independent variables for individual i at time tai = unobserved, time-constant effectuit = idiosyncratic error Although impossible to observe in reality, suppose that Cov(xitj , ai)=0 for all t=1, 2, . . . , T and all j=1, 2, . . . , k. Given the relationship between the explanatory variables and ai, the model can be best estimated by a model. True or False: Using pooled OLS to estimate the model would lead to unbiased standard errors. True False



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