What Can We Conclude About the Endogeneity of an Explanatory

question 18

Multiple Choice

What can we conclude about the endogeneity of an explanatory variable if the OLS and 2SLS estimates are significantly different? Assume that the instrument used was exogenous.

• A)The explanatory variable is not endogenous and therefore using 2SLS is ill-advised.
• B)The explanatory variable is not endogenous and therefore OLS should not be used.
• C)The explanatory variable is endogenous and therefore using 2SLS should be considered.
• D)The explanatory variable is endogenous and therefore OLS should be used.

Understand the purpose and scope of the Sarbanes-Oxley Act in promoting corporate accountability.

Identify investment schemes and their legality under federal securities laws.

Understand the definition and characteristics of an action potential.

Identify and describe the structural parts of a neuron.

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Definitions:

Major Life Events

Significant experiences or changes in a person's life that can have a profound impact on their well-being and life direction.

Daily Events

Occurrences and activities that happen throughout the course of a day, impacting individuals in various ways depending on their context and significance.

Interaction of Stimulus

The process by which multiple stimuli interact, influencing and altering an individual's response or behavior.

Stimulus

Any external event or circumstance that has the potential to elicit a reaction from our sensory systems or psychological responses.