Consider the Following Two Equations to Describe Labor Markets in Various

question 37

Multiple Choice

Consider the following two equations to describe labor markets in various sectors of the economy $N d=\beta_{0}+\beta_{1} \frac{W}{P}+u$

$N s=\gamma 0+\gamma 1 \frac{W}{P}+v$

$N d=N s=N$

• A)W/P is exogenous, n is endogenous
• B)Both n and W/P are endogenous
• C)n is exogenous, W/P is endogenous
• D)the parameters cannot be estimated because it would require two equations to be estimated at the same time (simultaneously)

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