Given the regression results Unemployment Rateit = ? + 0.8 (0.3) × Alabamait - 0.4 (0.2) × South Carolinait + 0.2 (0.3) × North Carolinait + 0.4 (0.12)MinimumWageit - 0.1 (0.1)Yeart, where the coefficients are reported with their standard errors in parenthesis, what might be a fact that would make you concerned about the interpretation of the coefficient on minimum wage as being causal?
A. National policies have led to stricter conditions to apply for unemployment insurance.
B. North Carolina has consistently had a higher share of college educated in the population relative to other states in the analysis.
C. In most instances, when a state raises the minimum wage it is also accompanied by state legislation that changes fiscal policy towards economic activity.
D. The minimum wage rate is different across many states in the southern region of the U.S.
Answer: C
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