In the Fixed Effects Regression Model, You Should Exclude One

question 38

Multiple Choice

In the Fixed Effects regression model, you should exclude one of the binary variables for the entities when an intercept is present in the equation

• A)because one of the entities is always excluded.
• B)because there are already too many coefficients to estimate.
• C)to allow for some changes between entities to take place.
• D)to avoid perfect multicollinearity.