You may select more than one condition you will receive, Econometrics

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You may select more than one condition you will receive

Consider the regression equation

2200_Regression equation.png

where x₂, is exogenous and x₃, is endogenous.

Which of the following conditions must a variable satisfy to be useful as an instrument for x₃,?

You may select more than one condition. You will receive credit for each correct condition. You will lose marks for selecting an incorrect condition. The lowest mark that you can score for this question is zero.

56_Regression equation.png

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