What Is the First Stage of 2SLS

question 4

Multiple Choice

What is the first stage of 2SLS?

• A)estimate parameters of reduced form equations and find predicted values
• B)find a random sample large enough to divide into 2 separate samples for the two stages
• C)estimate parameters of the structural equations using OLS
• D)use reduced form parameter estimates as explanatory variables

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Definitions:

Amortization Expense

The process of allocating the cost of an intangible asset over its useful life for accounting and tax purposes.

Retained Earnings

The portion of net income that is retained by the company rather than distributed to its shareholders as dividends, accumulated over the company’s life.

Beginning Period

This refers to the starting point or the first date of a financial reporting period.