The First-Stage in an Instrumental Variable Approach to Identify Simultaneous

Multiple Choice

The first-stage in an instrumental variable approach to identify simultaneous equations is to regress

A) the endogenous right hand side variables on the instruments and all exogenous variables.
B) the dependent variable on the predicted endogenous right hand side variables and the exogenous variables in each equation.
C) instrumental variable on all exogenous variables.
D) the exogenous right hand side variables on only the instrumental variables.