The Rule-Of-Thumb for Checking for Weak Instruments Is as Follows

question 6

Multiple Choice

The rule-of-thumb for checking for weak instruments is as follows: for the case of a single endogenous regressor,

• A)a first stage F must be statistically significant to indicate a strong instrument.
• B)a first stage F > 1.96 indicates that the instruments are weak.
• C)the t-statistic on each of the instruments must exceed at least 1.64.
• D)a first stage F < 10 indicates that the instruments are weak.

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Definitions:

Administrative Processes

Activities and procedures implemented within an organization to ensure efficient operation and management.

Lean Environment

A management philosophy focusing on minimizing waste within manufacturing systems while simultaneously maximizing productivity.

Raw and In Process Inventory

Items and materials that are either awaiting use in production or currently being manufactured.

Controlling Quality Costs

The process of managing and reducing the expenses associated with ensuring the quality of products or services.