A Pooled OLS Estimator That Is Based on the Time-Demeaned

question 11

Multiple Choice

A pooled OLS estimator that is based on the time-demeaned variables is called the _____.

• A)random effects estimator
• B)fixed effects estimator
• C)least absolute deviations estimator
• D)instrumental variable estimator

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Definitions:

Fixed Costs

Costs that do not change with the level of output or production, such as rent, salaries, and loan payments.

Operate

To control the functioning of a machine, process, or system.

Decreasing-Cost Industry

An industry where input costs tend to fall as the industry as a whole expands its output.

LRAC Curve

The Long Run Average Cost curve shows the lowest possible average cost of production at different levels of output when all inputs are variable.