Which of the Following Is True of the Correlated Random

Multiple Choice

Which of the following is true of the correlated random effects approach (CRE) ?

A) The CRE approach assumes that the unobserved effect is uncorrelated with the observed explanatory variables.
B) The CRE approach cannot be used if the regression model includes a time-constant explanatory variable.
C) The CRE approach considers that the unobserved effect is correlated with the average level of explanatory variables.
D) The CRE estimate equals the random effects estimate.