In Estimating the Causal Relationship Between Sales and Price in the Following

question 43

Multiple Choice

In estimating the causal relationship between Sales and Price in the following determining function Sales_i = β₀ + β₁Price_i + U_i, what assumption in addition to E [U_i ] = 0, justifies that the estimated coefficient on Price can be interpreted as an estimate of the causal effect of Price on Sales?

• A) E [Price_iU_i ] = 0
• B) E [Sales_iU_i ] = 0
• C) E [Price_iU_i ] = β₀
• D) E [Price_iU_i ] = β₁

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Definitions:

Abnormality

A deviation from the norm which may affect functionality or lead to psychological difficulties or disadvantages.

Brain Pathology

The study of diseases and disorders that affect the brain, impacting its structure and function.

Wilhelm Griesinger

A German psychiatrist and neurologist known for his belief that mental disorders are rooted in diseases of the brain.

Psychological Disorders

Mental health issues that significantly affect an individual’s thinking, emotional regulation, and behavior, distinct by patterns that deviate from cultural expectations.