Consider the Following Simple Regression Model: Y = ₀

question 17

Multiple Choice

Consider the following simple regression model: y = ₀ + ₁x₁ + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument exogeneity?

• A)Cov(z,u) > 0
• B)Cov(z,x) > 0
• C) Cov(z,u) = 0
• D) Cov(z,x) = 0

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Definitions:

Dairy Products

Foods made from the milk of mammals, such as cheese, milk, butter, and yogurt.

Eggs

Eggs are oval or round objects laid by female animals, particularly birds, consisting of an outer shell, white albumen, and a yolk, often consumed as food.

Vegetarianism

The dietary practice of abstaining from the consumption of meat, and may also include abstention from by-products of animal slaughter.

Leonardo Da Vinci

A Renaissance polymath known for his contributions to art, science, and invention, including works like the Mona Lisa.