Research Paper Writing- Econometrics

1. True or False. Explain your answer in detail.
   1. In a population regression model, Y = β₀+β₁X+u, β₀ and β₁ are unknown. Because of this uncertainty, Var(β₀) and Var(β₁) are not equal to zero.
      1. R² measures the ratio of variation that can be explained by the regression model to variation that can’t be explained by the regression model.
      1. E(u|X) = 0 only implies E(u) = 0. It doesn’t say anything about the relationship between u and X.
      1. In order for our regression estimators to be unbiased, we need the variance of X to be as small as possible. In the best scenario, we want the variance of X to be 0.
      1. The homoskedasticity assumption states that variances of error terms given different value of X are the same.