A. In the basic OLS regression specification, y = Po + B₁ x+u, discuss clearly under what conditions will B₁ be unbiased. (4 marks) B. What does it mean to say that an estimator ẞ is unbiased? What does it mean to say that an estimator ẞ is consistent? (2 marks) C. Give an example of an economic situation in which the resulting estimator is biased, but consistent. Explain why this is so. (4 marks) D. Your research includes a basic regression specification y = ẞx + yz + u, where x is an explanatory variable of interest and z is a set of control variables. Your null hypothesis is Ho: B = 1. You are choosing between two specifications, one excluding the control variables and one including the control variables. Estimation results are shown below: Variable X (1) 0.83 (0.20) (2) 1.08 (0.10) 1.00 (0.23) Z1 2.30 (1.96) Z2 Standard errors are presented in parenthesis. Does specification (1), which excludes control variables, embed an omitted variable bias? Would your answer change if your null hypothesis was Ho: ẞ = 0? Would your answer change if economic theory indicated that z did not belong in the specification? Justify your reasoning. (4 marks)