If Xit Is Correlated with Xis for Different Values of S

question 35

Multiple Choice

If Xit is correlated with Xis for different values of s and t,then

• A)Xit is said to be autocorrelated
• B)the OLS estimator cannot be computed
• C)statistical inference cannot proceed in a standard way even if clustered standard errors are used
• D)this is not of practical importance since these correlations are typically weak in applications

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Definitions:

Reciprocal Relationship

A mutual or two-sided relationship where both parties benefit, contribute, or are influenced by each other.

Psychological State

The mental condition of a person at a given time, encompassing emotions, thoughts, attitudes, and feelings.

Permanent State

A condition or status that does not change over time and remains constant indefinitely.

Despair

A profound sense of hopelessness, often accompanied by a loss of motivation and decreased emotional well-being.