Consider the Regression Example from Your Textbook, Which Estimates the Effect

question 19

Multiple Choice

Consider the regression example from your textbook, which estimates the effect of beer taxes on fatality rates across the 48 contiguous U.S. states. If beer taxes were set nationally by the federal government rather than by the states, then

• A)it would not make sense to use state fixed effect.
• B)you can test state fixed effects using homoskedastic-only standard errors.
• C)the OLS estimator will be biased.
• D)you should not use time fixed effects since beer taxes are the same at a point in time across states.

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Definitions:

Disequilibrium

A state of imbalance or instability, often used in economics to describe markets where supply and demand are not in balance, and in psychology, to describe the conflict experienced when existing knowledge does not fit with new information.

Imitative Capacity

The ability of an individual to mimic or reproduce actions, behaviors, or sounds observed from others.

Deferred Imitation

Imitating the behavior of an absent model; illustrates infants’ capacity for mental representation.

A-not-B Ability

A cognitive phenomenon observed in infants where they reach for a hidden object where they last found it (A) rather than its new location (B), showcasing a development phase in object permanence understanding.