Consider the following simple regression model: y = 0+ 1x1+ u. In order to obtain consistent estimators of

src="https://sciemce.com/media/2/ppg__cognero__Ch_15_Instrumental_Variables_Estimation_and_Two_Strage_Least_Squares__media__d15d8088-6a26-4e76-8757-cf8a8c5ae58c.PNG" style="vertical-align:middle;" />0and 1, when x and u are correlated, a new variable z is introduced into the model which satisfies the following two conditions: Cov(z,x)  0 and Cov (z,u) = 0. The variable z is called a(n) _____ variable.

A. dummy
B. instrumental
C. lagged dependent
D. random

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Answer: B

Economics

Index mutual funds purchase shares of stock in those companies which are included in the market based indexes

a. True b. False Indicate whether the statement is true or false

If transfer payments increase then we would most likely conclude what about government spending as a result of this increase?

A. We cannot reasonably conclude anything about government spending. B. Since transfer payments have gone up this has caused government spending to decrease. C. Since transfer payments have gone up this has caused government spending to increase. D. Government spending would not change if transfer payments increase.

The best public policy solutions to address the disruptions of foreign trade typically do not involve ____________.

a. politics b. public opinion c. economics d. protectionism

Compared to their percentage shares in 1968, over the next 40 years, the percentage shares of each of the lowest four quintiles

A. rose substantially. B. rose somewhat. C. stayed about the same. D. declined.