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Consider the Following Simple Regression Model Y = 0

Question 5

Multiple Choice

Consider the following simple regression model y = Consider the following simple regression model y = <sub>0</sub> + <sub>1</sub>x<sub>1</sub> + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument relevance? A) Cov(z,u) > 0 B) Cov(z,u) < 0 C) Cov(z,x) 0 D) Cov(z,x z) = 0 0 + Consider the following simple regression model y = <sub>0</sub> + <sub>1</sub>x<sub>1</sub> + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument relevance? A) Cov(z,u) > 0 B) Cov(z,u) < 0 C) Cov(z,x) 0 D) Cov(z,x z) = 0 1x1 + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument relevance?


A) Cov(z,u) > 0
B) Cov(z,u) < 0
C) Cov(z,x) Consider the following simple regression model y = <sub>0</sub> + <sub>1</sub>x<sub>1</sub> + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument relevance? A) Cov(z,u) > 0 B) Cov(z,u) < 0 C) Cov(z,x) 0 D) Cov(z,x z) = 0 0
D) Cov(z,x z) = 0

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