Questions 3
- What is the system of normal equations?
- Derive the OLS estimator for the model with multiple explanatory variables.
- Why it is not possible to calculate OLS estimator in the case when the number of parameters is larger than the number of observations?
- Prove that in the model with constant term the sum of residual is equal to zero.
- Show that in the model with constant term the mean value of dependent variable is equal to mean value of fitted variable.