Consider the Regression Example from Your Textbook, Which Estimates the Effect

question 27

Multiple Choice

Consider the regression example from your textbook, which estimates the effect of beer taxes on fatality rates across the 48 contiguous U.S.states.If beer taxes were set
Nationally by the federal government rather than by the states, then

• A)it would not make sense to use state fixed effect.
• B)you can test state fixed effects using homoskedastic-only standard errors.
• C)the OLS estimator will be biased.
• D)you should not use time fixed effects since beer taxes are the same at a point in time across states.

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Refers to the average number of years that a person is expected to live based on demographic factors like their year of birth, current age, and gender.

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