When a Lagged Dependent Variable Is Included as a Regressor,we

question 2

Multiple Choice

When a lagged dependent variable is included as a regressor,we must use a weaker form of assumption TSMR2 that allows the error term to be correlated with future values of explanatory variables,but not present or past values.What implications does this weaker assumption have for our regressors?

• A)biased,but consistent
• B)unbiased,but no longer BLUE
• C)unbiased,but no longer linear
• D)biased,but with minimum variance

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Definitions:

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