A Pattern in the Coefficients of the Time Fixed Effects

question 7

Multiple Choice

A pattern in the coefficients of the time fixed effects binary variables may reveal the following in a study of the determinants of state unemployment rates using panel data:

• A)macroeconomic effects, which affect all states equally in a given year.
• B)attitude differences towards unemployment between states.
• C)there is no economic information that can be retrieved from these coefficients.
• D)regional effects, which affect all states equally, as long as they are a member of that region.