Which of the following problems would lead an economist to use ...

[luminitza]

Which of the following problems would lead an economist to use instrument variable methods?
 
  A) The dependent variable has an impact on the independent variable.
  B) There are too few quarters of data.
  C) There are too many independent variables.
  D) The R2 is too high.
  E) The residuals are too small.

Question 2

A large T-statistic tell us that
 
  A) a tiny change in the independent variable will cause a relatively large change in the dependent variable.
  B) we do not have enough data to obtain an accurate regression line.
  C) we can be confident that our estimated coefficient is not zero.
  D) we should have included more lags in our model.
  E) we have incorrectly switched the dependent and independent variables in our model.

[1_Step_At_ATime]

Answer to Question 1

A

Answer to Question 2

C

[luminitza]

Thank you

[1_Step_At_ATime]

No problemo