Which of the Following Assumptions Is Required for Obtaining Unbiased

question 7

Multiple Choice

Which of the following assumptions is required for obtaining unbiased fixed effect estimators?

• A)The errors are heteroskedastic.
• B)The errors are serially correlated.
• C)The explanatory variables are strictly exogenous.
• D)The unobserved effect is correlated with the explanatory variables.

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Definitions:

Economic Profits

The excess of total revenues over total costs, including both explicit and implicit costs.

Perfect Competition

An ideal market structure characterized by infinite buyers and sellers, identical products, and no barriers to entry or exit.

Perfect Competition

A market structure characterized by many sellers and buyers, homogenous products, and no barriers to market entry or exit, leading to optimal pricing and efficiency.

Industry-wide Price

Industry-wide price refers to the general price level or average price for goods and services across a specific industry, reflecting the collective pricing trends and benchmarks.