Which of the Following Explains Why a 2SLS Model Can

question 5

Multiple Choice

Which of the following explains why a 2SLS model can be used to analyze randomized experiments with imperfect compliance?

• A) The random assignment (Z) is uncorrelated with the independent variable.
• B) The random assignment variable (Z) is correlated with the error term in the outcome equation.
• C) The random assignment (Z) is correlated with the independent variable but not with the error term in the outcome equation.
• D) The random assignment (Z) causes multicollinearity.

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