Which of the Following Is True About Fixed Effects Models $\alpha$

question 16

Multiple Choice

Which of the following is true about fixed effects models?

• A) We cannot use fixed effects models when we suspect there are fixed effects but no such effect exists (\(\alpha\)_i=0 for all units)
• B) Fixed effects models cannot generate a coefficient on a variable that is constant within all units.
• C) Fixed effects will generate a coefficient on a variable as long as that variable differs across units.
• D) A fixed effects model is not possible when there are a large number of units in the model.

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Definitions:

Population

The entire group of individuals or items of interest from which samples may be drawn for statistical analysis.

Quantitative

Refers to the measurement of something in terms of quantity or amount.

Categorical

Pertaining to data that can be divided into specific groups or categories that are mutually exclusive.

Data

Collected information or facts, typically numerical, that are used as a basis for reasoning, discussion, or calculation.