If an Explanatory Variable Is Strictly Exogenous It Implies That

question 6

Multiple Choice

If an explanatory variable is strictly exogenous it implies that:

• A)changes in the lag of the variable does not affect future values of the dependent variable.
• B)the variable is correlated with the error term in all future time periods.
• C)the variable cannot react to what has happened to the dependent variable in the past.
• D)the conditional mean of the error term given the variable is zero.

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