Multiple Choice
Consider the following simple regression model: y = β0+ β1x1+ u.Suppose z is an instrument for x.Which of the following conditions denotes instrument exogeneity?
A) Cov(z,u) > 0
B) Cov(z,x) > 0
C) Cov(z,u) = 0
D) Cov(z,x) = 0
Correct Answer:
Verified
Correct Answer:
Verified
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