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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