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Which Object from the First or Second Stage Reports Whether

Question 25

Multiple Choice

Which object from the first or second stage reports whether an instrument is exogenous?


A) Check if the residuals from the first stage regression are uncorrelated with the instrumental variable.
B) Check if the residuals from the second stage regression are uncorrelated with the instrumental variable.
C) Check if the instrumental variable is uncorrelated with the outcome variable.
D) None of the answers is correct.

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