All of us walk around with a little information and a substantial error term.

In fact this explains why the irregularity got its name, as a kind of 'error term'.

These two error terms can be used to eliminate each other.

That is, if we let the whole error term in the output equation be t then.

Further, the distribution of the error terms wouldn't have appropriate statistical characteristics.

One of these is that the error term has a constant variance.

The expected value of the error term is assumed to be zero.

Also note that we only need the error terms to be normally distributed.

We throw all those into what we call the error term.

In applications we pick u to get the best error term.