Principles of Econometrics 1. (a) i. As the sample size n, gets larger, the sample variance of the observed variables will tend to decrease. ii. The covariance of the two regressors will tend to decrease if the sample size increases. This is because the sample size n, is in the denominator in the formula of covariance. iii. In the regression model, the OLS coefficients will tend to more accurate estimates, if the sample size increases. T…
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