Which of the Following Assumptions Is Required for Obtaining Unbiased

question 7

Multiple Choice

Which of the following assumptions is required for obtaining unbiased fixed effect estimators?

• A)The errors are heteroskedastic.
• B)The errors are serially correlated.
• C)The explanatory variables are strictly exogenous.
• D)The unobserved effect is correlated with the explanatory variables.

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Definitions:

M1

A category of the money supply that includes all physical money like coins and currency, as well as demand deposits, checking accounts, and negotiable order of withdrawal (NOW) accounts.

M2

A measure of the money supply that includes cash, checking deposits, and easily convertible near money.

Monetary Policy

The method used by a country's monetary authority to regulate the amount of money in circulation, typically aiming at a specific inflation or interest rate to promote economic stability and expansion.

Lender Of Last Resort

An institution, typically a country's central bank, that offers loans to banks or other financial institutions that are experiencing financial difficulty or are considered highly risky.