The "Before and After" Specification, Binary Variable Specification, and "Entity-Demeaned

question 21

Multiple Choice

The "before and after" specification, binary variable specification, and "entity-demeaned" specification produce identical OLS estimates

• A)as long as there are observations for more than two time periods.
• B)if you use the heteroskedasticity-robust option in your regression program.
• C)for the case of more than 100 observations.
• D)as long as T = 2 and the intercept is excluded from the "before and after" specification.

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Definitions:

Labor Supply Curve

A graphical representation showing the relationship between the wage rate and the quantity of labor that workers are willing to supply.

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to replace more expensive items with cheaper alternatives.

Income Effect

The change in an individual's or economy's income and how that change will affect the quantity demanded of a good or service.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, making consumers substitute one good for another.