The notation for panel data is (Xit, Yit), i = 1, ..., n and t = 1, ..., T because
A) we take into account that the entities included in the panel change over time and are replaced by others.
B) the X's represent the observed effects and the Y the omitted fixed effects.
C) there are n entities and T time periods.
D) n has to be larger than T for the OLS estimator to exist.
Answer: C) there are n entities and T time periods.
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Refer to the scenario above. Which of the following statements is true?
A) The discounted value of $3,400 to be received after five years is $3,000. B) Tom's return from investing in his friend's project is higher than the amount received from the bank after five years. C) Tom's return from investing in the bank is higher than the amount received from his friend's project after five years. D) The returns on both investments are likely to be similar and Tom should be indifferent about investing in either options.
The law of one price (LOOP) indicates that:
a. Nominal interest rates in countries should be identical because if they were not, arbitragers could make risk-free profits. b. The price of a good in one country should be equal to the exchange-rate-adjusted price of the same product in another country. c. The quantity produced of a good in one country should be equal to the exchange-rate-adjusted quantity produced of the same product in another country. d. The nominal wage rate in one country should be equal to the exchange-rate-adjusted wage of the average laborer in another country. e. All the above.