When using panel data and in the presence of endogenous regressors
A) the TSLS does not exist.
B) you do not have to worry about the validity of instruments, since there are so many fixed effects.
C) the OLS estimator is consistent.
D) application of the TSLS estimator is straightforward if you use two time periods and difference the data.
Answer: D
You might also like to view...
Complete this statement. Sellers compete against other sellers and
A) sellers compete against buyers. B) sellers cooperate with buyers. C) buyers cooperate with other buyers. D) both A and C are true.
The most severe depression in the United States was the 30 percent decrease in real GDP that occurred between
a. 1899 and 1913. b. 1929 and 1933. c. 1959 and 1963. d. 1979 and 1983.
Suppose that more British decide to vacation in the U.S. and that the British purchase more U.S. Treasury bonds. Ignoring how payments are made for these purchases,
a. the first action by itself raises U.S. net exports, the second action by itself raises U.S. net capital outflow. b. the first action by itself raises U.S. net exports, the second action by itself lowers U.S. net capital outflow. c. the first action by itself lowers U.S. net exports, the second action by itself raises U.S. net capital outflow. d. the first action by itself lowers U.S. net exports, the second action by itself lowers U.S. net capital outflow.
If interest rates rose more in the U.S. than in France, then other things the same
a. U.S. citizens would buy more French bonds and French citizens would buy more U.S. bonds. b. U.S. citizens would buy more French bonds and French citizens would buy fewer U.S. bonds. c. U.S. citizens would buy fewer French bonds and French citizens would buy more U.S. bonds. d. U.S. citizens would buy fewer French bonds and French citizens would buy fewer U.S. bonds.