Consider the Following Simple Regression Model Y = β₀

Multiple Choice

Consider the following simple regression model y = β₀ + β₁x₁ + u and z is an instrument for x. Suppose x and z are both positively correlated with u and Corr(z,x) > 0. Then, the asymptotic bias in the IV estimator is less than that for OLS only if:​

A) ​Corr(z,u) / Corr(z,x) = Corr(x,u) .
B) ​Corr(z,u) / Corr(z,x) > Corr(x,u) .
C) ​Corr(z,u) / Corr(z,x) < Corr(x,u) .
D) ​Corr(z,u) / Corr(z,x) ≠ Corr(x,u) .