Consider the Following Simple Regression Model Y = ₀

question 5

Multiple Choice

Consider the following simple regression model y = ₀ + ₁x₁ + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument relevance?

• A)Cov(z,u) > 0
• B)Cov(z,u) < 0
• C)Cov(z,x) 0
• D)Cov(z,x z) = 0

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Definitions:

Documenting

The process of recording information, observations, or data on various mediums for future reference, analysis, or compliance.

Coach

A person who supports, instructs, and guides an individual or team to achieve their goals and improve their performance.

Improvement

The process of becoming better in quality, condition, or performance.

Structure

The arrangement of and relations between the parts or elements of something complex, such as an organization or a building.