Under the classical errors-in-variables (CEV) assumption, the measurement error means that the estimated OLS effect, on average, is closer to zero than the true effect.
Answer the following statement true (T) or false (F)
True
Rationale: The CEV assumption implies that the measurement error results in the attenuation bias in OLS. In other words, that the estimated OLS effect, on average, is closer to zero than the true effect.
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