One of the assumptions for the plug-in solution to provide consistent estimators of?1and ?2is that the erroruis uncorrelated with all the independent variables.
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Answer the following statement true (T) or false (F)
True
Rationale: FEEDBACK: One of the assumptions for the plug-in solution to provide consistent estimators of ?1 and ?2 is that the error u is uncorrelated with all the independent variables.?
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A production possibilities frontier is bowed outward when
a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. b. an economy is self-sufficient instead of interdependent and engaged in trade. c. the rate of tradeoff between the two goods being produced is constant. d. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.
The horizontal intercept of the intertemporal budget constraint is referred to as
A. the future value of present income. B. the future value of lifetime income. C. the present value of lifetime income. D. the current value of future income.
In an aggregate demand and aggregate supply graph, a contractionary fiscal policy can be best illustrated by a:
A. rightward shift in the aggregate supply curve. B. movement along an existing aggregate supply curve. C. leftward shift in the aggregate demand curve. D. rightward shift in the aggregate demand curve.
If the dollar rose by 35% relative to other currencies, our current account deficit would
A. rise sharply. B. rise slightly. C. not be affected. D. fall slightly.