Suppose You Are Trying to Estimate the Following Regression: Y_i

question 1

Multiple Choice

Suppose you are trying to estimate the following regression: Y_i = β₀ + β₁X_1i + β₂X_2i + β₃X_3i + U_i, with an instrument for Z_i for X_2i. All of the following variables will be included (on the right- and left-hand side of this regression) in the first stage of two-stage least squares except for which one?

• A) X_1i
• B) X_2i
• C) X_3i
• D) Y_i

---

Definitions:

Subcontracting

The practice of assigning or outsourcing part of the contractual obligations or work to another party, often to specialize or expedite processes.

Seasonal Workforce

Employees hired on a temporary basis, often in industries that experience fluctuations in demand at different times of the year.

Tourism Industry

A sector of the economy that encompasses all activities related to travel and hospitality for leisure or business purposes.

Aggregate Planning

a process in operations management aimed at determining optimal production levels, inventory levels, and workforce levels, considering forecasted demand over a medium-term horizon.