Which of the Following Statements Is True

question 19

Multiple Choice

Which of the following statements is true?

• A)Fixed effects estimation is not suitable when the unobserved cluster effect is correlated with one or more explanatory variables.
• B)Fixed effects approach is not applicable if the key explanatory variables change only at the level of the cluster.
• C)The ordinary least squares standard errors are incorrect when there is cluster effect.
• D)Random effects estimation can be applied to a cluster sample only if the unobserved cluster effect is correlated with one or more explanatory variables.

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Definitions:

Bargaining Unit

A group of employees with a clear and identifiable community of interest who are represented by a single labor union in collective bargaining.

Public Sector

The part of the economy that is controlled by the government including services such as education, healthcare, and law enforcement.

Private Sector

The part of the economy owned and operated by individuals and companies for profit, as opposed to the public sector operated by the government.

Picketing

The act of demonstrating or protesting, often by workers, outside a place of employment to voice grievances or demands.