The Random Effects Approach _____

question 13

Multiple Choice

The random effects approach _____.

• A)cannot be used if the key explanatory variable is constant over time
• B)is preferred to pooled OLS because RE is generally more efficient
• C)is suitable if the Hausman test rejects the assumption that the unobserved effect is uncorrelated with the explanatory variables
• D)is more convincing than fixed effects for policy analysis using aggregate data

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Definitions:

Emails

Electronic messages sent or received over a computer network, used for personal or business communication.

Written Record

Documentation of information, events, or ideas preserved in written form.

Short Message Service

A text messaging service component of most telephone, internet, and mobile device systems that allows users to send and receive short text messages.

Memos

Short written communications typically used within an organization to inform or instruct employees.