Weak Instruments Are a Problem Because

question 4

Multiple Choice

Weak instruments are a problem because

• A)the TSLS estimator may not be normally distributed, even in large samples.
• B)they result in the instruments not being exogenous.
• C)the TSLS estimator cannot be computed.
• D)you cannot predict the endogenous variables any longer in the first stage.

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Definitions:

Operating Departments

Divisions or units within an organization directly involved in its core business activities, responsible for producing the goods or services it offers.

Income Statements

Reports that detail the revenue, expenses, and profitability of a company over a defined accounting period, showing its financial performance.

Service Departments

Units within an organization that provide support services to other departments, rather than producing goods or services for external customers.

Generate Revenues

The process of earning income from business activities, such as sales of goods and services.