How Does the Least Squares Estimator Perform on a Simultaneous

question 6

Multiple Choice

How does the least squares estimator perform on a simultaneous equation model with an endogenous regressor?

• A)unbiased and consistent in large samples
• B)unbiased but inconsistent in all sample sizes
• C)biased but consistent in large samples
• D)biased and inconsistent for structural equations,but unbiased and consistent for reduced form equations

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Definitions:

Rejection Region

The rejection region is the range of values of the test statistic that leads to rejection of the null hypothesis in a statistical hypothesis test.

Students

Individuals engaged in the pursuit of education, usually within an academic institution such as a school or university.

Heart Attack

A medical condition occurring when the flow of oxygen-rich blood to a section of the heart is blocked, often resulting in damage to the heart muscle.

Incidence

The frequency at which a new event occurs in a specified population over a particular period of time.