If You Included Both Time and Entity Fixed Effects in the Regression

question 14

Multiple Choice

If you included both time and entity fixed effects in the regression model which includes a constant, then

• A)one of the explanatory variables needs to be excluded to avoid perfect multicollinearity.
• B)you can use the "before and after" specification even for T > 2.
• C)you must exclude one of the entity binary variables and one of the time binary variables for the OLS estimator to exist.
• D)the OLS estimator no longer exists.

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