If You Included Both Time and Entity Fixed Effects in the Regression

question 14

Multiple Choice

If you included both time and entity fixed effects in the regression model which includes a constant, then

• A)one of the explanatory variables needs to be excluded to avoid perfect multicollinearity.
• B)you can use the "before and after" specification even for T > 2.
• C)you must exclude one of the entity binary variables and one of the time binary variables for the OLS estimator to exist.
• D)the OLS estimator no longer exists.

---

Definitions:

Client Expectations

The anticipated or desired services, products, or interactions that clients foresee in a business relationship.

Specification Document

A detailed description of technical requirements, standards, and procedures that must be followed to complete a project or create a product.

Local Factories

Manufacturing facilities located within a specific geographical area, often mentioned in the context of regional economic development or supply chains.

Organizations

Entities comprising multiple people working together towards a common goal, characterized by a structured system of roles, responsibilities, and processes.