In the Case of the Simple Regression Model Yi =

question 10

Multiple Choice

In the case of the simple regression model Yi = β0 + β1Xi + ui,i = 1,…,n,when X and u are correlated,then

• A)the OLS estimator is biased in small samples only.
• B)OLS and TSLS produce the same estimate.
• C)X is exogenous.
• D)the OLS estimator is inconsistent.

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Definitions:

Account Balances

The amounts of money present in or owed by an account at any given time.

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is kept by the company for reinvestment in its core business or to pay debt.

Office Equipment

The fixtures, machinery, and devices used in an office environment to support business operations, including computers, printers, and copiers.

Dividends

Payments made by a corporation to its shareholder members, typically out of its profits.