Endogeneity of an Independent Variable Presents a Challenge Because

question 2

Multiple Choice

Endogeneity of an independent variable presents a challenge because

• A)OLS estimates are biased and inconsistent.
• B)it causes the regression to be perfectly collinear.
• C)it leads to heteroskedasticity.
• D)OLS estimates remained unbiased but they are no longer BLUE.

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Definitions:

Population Increase

The growth in the number of inhabitants in a particular area or country over time, driven by factors such as birth rates, migration, and mortality rates.

Economic Impact

The effect of an event, policy, or market condition on the economy, which can affect employment, income levels, and gross domestic product (GDP).

Eighteenth Century

The eighteenth century refers to the period from 1701 to 1800, marked by significant developments in philosophy, science, and politics.

Economic Classes

These are categorizations of individuals in a society based on their economic status, often divided into upper, middle, and lower classes.