The Rank Condition for Identification of a Structural Equation States

question 2

Multiple Choice

The rank condition for identification of a structural equation states that the first equation in a two-equation simultaneous equations model is identified if, and only if:

• A)the first equation contains at least one exogenous variable (with a nonzero coefficient) that is excluded from the second equation.
• B)the first equation contains at least two exogenous variables (with a nonzero coefficient) that are excluded from the second equation.
• C)the second equation contains at least one exogenous variable (with a nonzero coefficient) that is excluded from the first equation.
• D)the second equation contains at least two exogenous variables (with a nonzero coefficient) that are excluded from the first equation.

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