For W to Be an Effective Control Variable in IV

question 28

Multiple Choice

For W to be an effective control variable in IV estimation, the following condition must hold

• A)E(u_i)= 0
• B)E(u_i|Z_i,W_i)= E(u_i|W_i)
• C)E(u_iu_j)≠ 0
• D)there must be an intercept in the regression

---

Definitions:

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Dividends

Earnings distributed to a company's shareholders, commonly as a profit disbursement.

Fees Earned

Income received for services provided, often used in professional and consulting business models.

Supplies

Items used in the operation of a business, often consumable, like stationery, raw materials, or maintenance supplies.