A possible solution to errors-in-variables bias is to

A) use log-log specifications.
B) choose different functional forms.
C) use the square root of that variable since the error becomes smaller.
D) mitigate the problem through instrumental variables regression.


Answer: D) mitigate the problem through instrumental variables regression.

Economics

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The level of potential output in the United States increases as the

A) supply of labor decreases. B) demand for labor decreases. C) supply of labor increases. D) stock of capital decreases.

Economics

Refer to Figure 13-1. Ceteris paribus, an increase in the price level would be represented by a movement from

A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.

Economics

The ceteris paribus assumption means

A) favors are returned in kind. B) this is the proof of the matter. C) from many, one. D) other things are equal.

Economics

Given a downward-sloping aggregate demand curve, if short-run aggregate supply increases, real GDP must increase and nominal GDP must fall

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

Economics