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A function is an equation for which any x which can be plugged into the equation will yield accurately one y out of the equation.
There it is. i.e. the definition of functions which we're going to employ and will probably be easier to decipher just what it means.
Before we study this a little more note that we utilized the phrase "x which can be plugged into" in the definition. It tends to imply that not all x's can be plugged in an equation & it is actually correct. We will come back & discuss it in more detail towards the end of this section, though at this point just remember that we can't divide by zero & if we desire real numbers out of the equation we can't take the square root of a -ve number. Thus, with these two instances it is clear that we will not always be capable to plug in every x into any equation.
Further, while dealing along with functions we are always going to suppose that both x and y will be real numbers. In other terms, we are going to forget that we know anything regarding complex numbers for a little bit whereas we deal with this section.
Okay, with that out of the way let's get back to the definition of a function & let's look at some instance of equations which are functions & equations that aren't functions.
1. Consider the model Y t = β 0 + β 1 X t + ε t , where t = 1,..., n. If the errors ε t are not correlated, then the OLS estimates of β 0 and β
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