Which of the Following Is a Reason for Using the Correlated

question 18

Multiple Choice

Which of the following is a reason for using the correlated random effects approach?

• A)It provides unbiased and consistent estimators when the idiosyncratic errors are serially correlated.
• B)It provides unbiased and consistent estimators when the idiosyncratic errors are heteroskedastic.
• C)It provides a more efficient estimate than the fixed effects approach.
• D)It provides a way to include time-constant explanatory variables in a fixed effects analysis.

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Definitions:

Intensity

The degree of strength, force, or energy in a phenomenon such as light, sound, or an emotion.

External Sources

Pertains to information or influences that come from outside an individual or system, as opposed to internal or innate sources.

Self-initiated

Actions or activities that are begun or carried out by an individual independently, without external prompting or instruction.

Successful Outcome

The achievement of desired goals or results from a particular process or activity.