Suppose you are trying to estimate the following regression: Yi = ?0 + ?1X1i + ?2X2i + ?3X3i + Ui, with an instrument for Zi for X2i. All of the following variables will be included (on the right- and left-hand side of this regression) in the second stage of two-stage least squares except for which one?
A. Yi
B. X2i
C. X3i
D. X1i
Answer: B
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A) deserts B) tundra C) deciduous forests D) chaparral
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Indicate whether the statement is true or false