QUESTION 7 In order to estimate the effect on wage of years of schooling, researcher B analysed the dataset that researcher A collected in the previous question. Researcher B considers the following...

Extracted text: QUESTION 7 In order to estimate the effect on wage of years of schooling, researcher B analysed the dataset that researcher A collected in the previous question. Researcher B considers the following regression equation, log(income);=Bo+Bieduc;+ + u; %3D where educ, is years of school of individual j and she realised that unobserved factors such as motivation, and work ethic, would determine the income level and be correlated with the variable of interest i ... includes additional terms associated with other characteristics in the data set. When researcher B was carefully examining omitted factors in the error term Up regarding the unobserved factors is correct, then: educ; If researcher B's conjecture O a. The OLS estimator a would not be computed. Ob. The OLS estimator B1 would overestimate the effect on income, of educ; c. The OLS estimator B1 would would suffer imperfect multicollinearity. Od. The OLS estimator B1 would have a large standard error. Oe. The OLS estimator B1 would follow the Student t-distribution with n-k degrees of freedom, where k is the number of coefficients to estimate in the model.