If the Instruments Are Not Exogenous

question 7

Multiple Choice

If the instruments are not exogenous,

• A)you cannot perform the first stage of TSLS.
• B)then, in order to conduct proper inference, it is essential that you use heteroskedasticity-robust standard errors.
• C)your model becomes overidentified.
• D)then TSLS is inconsistent.

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Definitions:

Fracturing

The act or process of breaking or cracking solid materials, often referring to rocks splitting due to physical, chemical, or mechanical forces.

Brittle Conditions

Scenarios in which rocks fracture or break apart rather than deform plastically when subjected to stress, typically occurring at shallower depths.

Relatively Shallow

Describes an area, feature, or process that occurs at a minor depth beneath the surface or water.

Fracturing

The breaking or splitting of rocks due to physical forces, without the material undergoing a significant change in chemical composition or texture.