Suppose We Omit X₃ from the Following in a Bivariate $\beta$

Suppose we omit X₃ from the following in a bivariate model
Y_i = $\beta$ ₀ + $\beta$ ₁X_1i + $\beta$ ₂X_2i + $\varepsilon$ _i
And suppose each of the independent variables is completely uncorrelated with the other independent variables (i.e., they have been randomly chosen in a randomized experiment) . What is the consequence of omitting X₃ on $\beta$ ₁hat?

A) No effect; $\beta$ ₁hat will be unbiased.
B) $\beta$ ₁hat will be biased toward zero.
C) $\beta$ ₁hat will be more positive than it should be.
D) $\beta$ ₁hat will be less positive than it should be.

Correct Answer:

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