If L Is the Number of Exogenous Instruments and B

question 1

Multiple Choice

If L is the number of exogenous instruments and B is the number of endogenous regressors in the model,when L > B the model is

• A)just identified
• B)over identified
• C)under identified
• D)perfectly identified

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Definitions:

Retained Earnings

The portion of net income that is retained by the corporation rather than distributed to its shareholders as dividends.

Total Stockholders' Equity

This represents the total amount of capital contributed by shareholders plus the retained earnings of a company, indicating the net worth of the company from a shareholder's perspective.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, although the market capitalization remains the same.

Paid-in Capital

The amount of money that a company has received from shareholders in exchange for shares of stock, beyond the par value of the shares.