The notation for panel data is (Xit, Yit), i = 1, ..., n and t = 1, ..., T because
A) we take into account that the entities included in the panel change over time and are replaced by others.
B) the X's represent the observed effects and the Y the omitted fixed effects.
C) there are n entities and T time periods.
D) n has to be larger than T for the OLS estimator to exist.
Answer: C) there are n entities and T time periods.
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The present value of a stream of future revenues varies ________ with the future revenues and ________ with the interest rate
A) inversely; inversely B) directly; directly C) inversely; directly D) directly; inversely
Country X is a small country, with demand and supply functions for the food grains:QD = 150 - 0.6PQS = -40 + 0.5P where QD and QS are in millions of tons and P is the price per ton. The world price of grain is $200 per ton. a. In a situation of free trade, how much food grains would be produced, consumed, and traded in Country X?b. As a response to alleged unfair foreign practices, Country X farmers successfully lobby for a $20 export subsidy per ton of the grains exported. Assuming that imports of food grains are banned, show graphically and explain the impact of the export subsidy on domestic prices, consumption, production, and exports of grain by this country. Also indicate, using your graph, the effects on well-being of domestic producers and consumers and the cost of the
subsidy to the government, as well as the net change in well-being in Country X. For each of these changes, calculate the money amount of each of the changes in well-being and government cost. What will be an ideal response?
An ________ distribution of income would yield a ________ curve that was a 45-degree line between 0 and 100%.
A. equal; Lorenz B. equal; Gini C. unequal; Gini D. unequal; Lorenz
If inflation is positive and is perfectly anticipated,
A) those that lend money lose. B) those that hold paper money lose. C) those that borrow money lose. D) no one in the economy loses.