The Rank Condition for Identification of a Structural Equation States

question 2

Multiple Choice

The rank condition for identification of a structural equation states that the first equation in a two-equation simultaneous equations model is identified if, and only if:

• A)the first equation contains at least one exogenous variable (with a nonzero coefficient) that is excluded from the second equation.
• B)the first equation contains at least two exogenous variables (with a nonzero coefficient) that are excluded from the second equation.
• C)the second equation contains at least one exogenous variable (with a nonzero coefficient) that is excluded from the first equation.
• D)the second equation contains at least two exogenous variables (with a nonzero coefficient) that are excluded from the first equation.

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Definitions:

Industrial Regulation

Government policies and rules governing the operations of specific industries to ensure fair competition, consumer protection, and to prevent monopolies.

Price Discrimination

A pricing strategy where identical or substantially similar goods or services are sold at different prices by the same provider in different markets or to different customers.

Antitrust Legislation

Laws aimed at promoting competition and preventing monopolies by regulating corporate behaviors that limit market competition.

Celler-Kefauver Act

A U.S. law aimed at limiting anticompetitive mergers and acquisitions by restricting asset purchases and inter-corporate stock purchases.