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Let {(yi; xi); 1 ≤ i ≤ n} be an i.i.d sequence of random variables where yi and xi satisfy the linear relationship yi = β0 + β1xi + ∈i with Cov(xi; ∈i) = 0 and yi ∈ {0, 1} (i.e. yi is a binary dependent variable).
(a) Describe the main limitations of estimating β1 via OLS.
(b) Describe an alternative approach to estimation based on the Probit Model. Note that I expect you to be able to formulate the likelihood function.
The government decides to implement a new economic stimulus package targeted at American Farmers. The stimulus package gives every household a $300 prepaid credit card that may on
What is "high-powered money"? The "high-powered money" is the similar as monetary base, which is defined, at the minimum, as the sum of the currency in circulation (banknotes
show that the necessary and sufficient conditions for consumer equilibrium under both cardinal and ordinal utility theories are identical .
Why does a monopoly have no supply curve? A supply curve is a curve that shows the quantity supplied at dissimilar prices, as a monopoly sets the price and the quantity togeth
Question 1: i) Use a simple human capital model to explain the rationale for undertaking higher education. ii) Why do some people vary significantly in the amounts of human
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-1- ASSIGNMENT #1 The demand function for Product X is given by: Qdx = 80- 2Px- 0.05P²x -0.2Py + 4Pz + 0.01I+ 2A Where: Px Price of good X $120.00 Py Price of related good y $100.0
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