Fixed-Effects Models Are Preferable to Pooled Cross-Section Models Because They

question 21

Multiple Choice

Fixed-effects models are preferable to pooled cross-section models because they

• A)first-difference the data.
• B)control for potential heteroskedasticity.
• C)control for autocorrelation.
• D)remove the time-invariant component of the error term.

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Definitions:

Multiple Products

Refers to a range of different items or SKUs that a company produces or sells.

Postponement

A strategy in logistics and supply chain management that delays product customization until customer orders are received, to reduce inventory and improve responsiveness.

Overall Profits

The total financial gains made by a company after all expenses and costs have been subtracted from total revenues.

Single Product

Refers to a business or production strategy focusing on the manufacture or sale of only one type of product.