Consider a Model with One Endogenous Regressor and Two Instruments

question 35

Multiple Choice

Consider a model with one endogenous regressor and two instruments. Then the J-statistic will be large

• A)if the number of observations are very large.
• B)if the coefficients are very different when estimating the coefficients using one instrument at a time.
• C)if the TSLS estimates are very different from the OLS estimates.
• D)when you use homoskedasticity-only standard errors.

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Definitions:

Surplus

Occurs when the quantity of a good or service supplied exceeds the quantity demanded, often resulting in a decrease in price.

Sellers

Individuals or entities that provide goods or services in exchange for payment, playing a critical role in the dynamics of supply and market operations.

Shortage

A situation where the demand for a product or service exceeds the available supply at a specific price point.

Surplus

A situation where the quantity of a good or service supplied exceeds the quantity demanded, typically leading to lower prices.