In the Case of the Simple Regression Model Y_i =

question 8

Multiple Choice

In the case of the simple regression model Y_i = β₀ + β₁X_i + u_i, i = 1, …, n, when X and u are correlated, then

• A)the OLS estimator is biased in small samples only.
• B)OLS and TSLS produce the same estimate.
• C)X is exogenous.
• D)the OLS estimator is inconsistent.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered but not yet paid for.

Inventory

The total amount of goods and materials held by a business for resale or production.

Notes Payable

Financial obligations or loans that a company must repay to creditors, typically documented through formal agreements.

Chart Of Accounts

A list of all accounts used by a business, categorized into assets, liabilities, equity, revenue, and expenses, to organize financial transactions.