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In the Model Yt = α0 + α1xt1 + α2xt2

Question 20

Multiple Choice

In the model yt = α0 + α1xt1 + α2xt2 + …..+ α?kxtk + ut,the explanatory variables,xt = (xt1,xt2 …. ,xtk) ,are sequentially exogenous if:


A) E(ut|xt,xt-1,……) = E(ut) = 0,t = 1,2,….
B) E(ut|xt,xt-1,……) ≠ E(ut) = 0,t = 1,2,….
C) E(ut|xt,xt-1,……) = E(ut) > 0,t = 1,2,….
D) E(ut|xt,xt-1,……) = E(ut) = 1,t = 1,2,….

Correct Answer:

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