Which of the Following Statements Is True

question 23

Multiple Choice

Which of the following statements is true?

• A)White test can be used to efficiently determine the presence of serial correlation in panel data.
• B)The t statistic is not an efficient test to determine serial correlation in panel data.
• C)Instrumental variables for both endogenous and exogenous variables are required for estimating simultaneous equation models concerned with panel data.
• D)2SLS should be applied to simultaneous equation models with panel data only after removing the unobserved effects from the equations of interest.

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Definitions:

Relative Market Values

The comparison of an item’s market price to other similar items in the relevant market.

Depreciation Expense

The portion of the cost of a fixed asset that is considered as an expense due to its use, wear, and tear over time.

Estimated Useful Life

The length of time, usually expressed in years or periods, that an asset is expected to be used in business operations.

Plant Assets

Durable physical assets utilized in manufacturing goods and providing services, including structures, machines, and tools.