(Requires Appendix Material)When the Fifth Assumption in the Fixed Effects

question 31

Multiple Choice

(Requires Appendix material) When the fifth assumption in the Fixed Effects regression (cov (u_it, u_is | X_it, X_is) = 0 for t ? s) is violated, then

• A)using heteroskedastic-robust standard errors is not sufficient for correct statistical inference when using OLS.
• B)the OLS estimator does not exist.
• C)you can use the simple homoskedasticity-only standard errors calculated in your regression package.
• D)you cannot use fixed time effects in your estimation.

Understand the principle of respondeat superior and its application.

Learn the rules governing the termination of an agency relationship.

Identify the responsibilities and liabilities associated with hiring practices and the torts committed by employees.

Analyze the role of ratification in binding principals to agents' agreements.

---

Definitions:

Sale

A transaction between two parties where the buyer receives goods, services, or assets in exchange for money or other consideration.

Exchange

Exchange involves the act of trading goods, services, currencies, or other instruments between parties.

Impairment Losses

Financial losses recorded when an asset's market price drops below its book value.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its identifiable net assets, representing future economic benefits from assets not separately identified.