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Consider the Following Simple Regression Model Y = 0

Question 25

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. The variable z is a poor instrument for x if _____. A) there is a high correlation between z and x B) there is a low correlation between z and x C) there is a high correlation between z and u D) there is a low correlation between z and u 0 + Consider the following simple regression model y = <sub>0</sub> + <sub>1</sub>x<sub>1</sub> + u. The variable z is a poor instrument for x if _____. A) there is a high correlation between z and x B) there is a low correlation between z and x C) there is a high correlation between z and u D) there is a low correlation between z and u 1x1 + u. The variable z is a poor instrument for x if _____.


A) there is a high correlation between z and x
B) there is a low correlation between z and x
C) there is a high correlation between z and u
D) there is a low correlation between z and u

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