If L Is the Number of Exogenous Instruments and B

question 17

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)precisely identified

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Definitions:

Accounting Equation

The fundamental formula representing the relationship between assets, liabilities, and equity (Assets = Liabilities + Equity).

Asset

An economic resource owned or controlled by an individual or business, expected to provide future benefits.

Liability

Any financial debt or obligation that a company owes, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Owner's Equity

The residual interest in the assets of a business after deducting liabilities, representing the ownership interest of shareholders in a company.