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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