Suppose you estimated the following relationship: Migration =0+1 Border +2 RelativeIncome +3 Border RelativeIncome +u The amount of migration between two countries is regressed on a categorical variable equal to 1 if the two countries share a border and 0 otherwise; a measure of relative income between the two countries, and an interaction effect between the presence of a border and relative income. Which of the following would be consistent with the observations that there is more migration between countries that border each other and with larger relative income gaps, but the effect of relative income is smaller for countries that border each other? 1>0,2>0,3<0 1>0,2>0,3>01>0,2<0,3>01<0,2<0,3>0.

1. Suppose you estimated the following relationship: Migration =0+1 Border +2 RelativeIncome +3
Border RelativeIncome +u The amount of migration between two countries is regressed on a
categorical variable equal to 1 if the two countries share a border and 0 otherwise; a measure of
relative income between the two countries, and an interaction effect between the presence of a
border and relative income. Which of the following would be consistent with the observations that
there is more migration between countries that border each other and with larger relative income
gaps, but the effect of relative income is smaller for countries that border each other? 1>0,2>0,3<0
1>0,2>0,3>01>0,2<0,3>01<0,2<0,3>0