Which of the Following Assumptions Is Required for Two Stages

question 1

Multiple Choice

Which of the following assumptions is required for two stages least squares estimation with time series data but not required for two-stage least squares estimation with cross sectional data?

• A)The conditional mean of the error term is zero.
• B)The error term has constant conditional variance.
• C)The model includes at least one dummy variable.
• D)The error terms are not serially correlated.

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