Consider a simple linear regression model, y = ?0+ ?1x + u,. What does the zero conditional mean assumption imply?
A. The expected value of the error term, u , is zero, regardless of what the value of the explanatory variable, x, is.
B. The estimated average value of ?1 is zero.
C. The expected value of the explained variable, y , is zero, regardless of what the value of the explanatory variable, x , is.
D. The estimated average value of ?0 is zero.
Answer: A
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