The Variance of 2SLS Bj Will Be Lower If

question 7

Multiple Choice

The variance of 2SLS Bj will be lower if:

• A) If we have a weak instrument
• B) If we have a worse fit at the first stage of the regression
• C) If the instrument has a high explanatory power for X
• D) If we have a smaller sample size

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Definitions:

Producing Purses

Producing purses involves the manufacturing and assembling of various materials to create handbags and similar accessories.

Average Fixed Cost

The sum of all production fixed costs divided by the number of units produced.

Producing Purses

Involves the manufacturing and crafting of handbags and purses, often focusing on aspects like design, material quality, and functionality.

Long-Run Minimum Cost

The lowest cost at which a firm can produce any given level of output in the long run when all inputs are variable.