Which Object from the First or Second Stage Reports Whether

question 25

Multiple Choice

Which object from the first or second stage reports whether an instrument is exogenous?

• A) Check if the residuals from the first stage regression are uncorrelated with the instrumental variable.
• B) Check if the residuals from the second stage regression are uncorrelated with the instrumental variable.
• C) Check if the instrumental variable is uncorrelated with the outcome variable.
• D) None of the answers is correct.

---

Definitions:

Economic Espionage

The act of secretly gathering proprietary or economically valuable information about the competition for commercial advantage.

Unethical Behavior

Unethical behavior refers to actions that go against moral principles and standards, often causing harm or disadvantaging others in the social or professional realm.

Competition

The presence of multiple companies or entities in the same marketplace, vying for the same customers or market share.

Environmental Scanning

The process of systematically collecting information about external factors that can impact an organization's success.