Linear Modelingmedium
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Suppose the true relationship between two variables is y=2.0x+5.0+ϵy = 2.0x + 5.0 + \epsilon. However, the researcher cannot measure xx directly and instead measures x=x+ux^* = x + u, where uu is a random measurement error that is independent of xx and ϵ\epsilon. If the researcher fits a simple linear regression of yy on xx^*, what is the effect of this measurement error on the estimated slope?