To calculate the J-statistic you regress the
A) squared values of the TSLS residuals on all exogenous variables and the instruments. The statistic is then the number of observations times the regression R2.
B) TSLS residuals on all exogenous variables and the instruments. You then multiply the homoskedasticity-only F-statistic from that regression by the number of instruments.
C) OLS residuals from the reduced form on the instruments. The F-statistic from this regression is the J-statistic.
D) TSLS residuals on all exogenous variables and the instruments. You then multiply the heteroskedasticity-robust F-statistic from that regression by the number of instruments.
Answer: B
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Two countries engaged in trade in products with no scale economies, produced under conditions of perfect competition, are likely to be engaged in
A) inter-industry trade. B) monopolistic competition. C) intra-industry trade. D) Heckscher-Ohlin trade. E) oligopolistic competition
If one of the agents in an Edgeworth Box has monopoly power and maximizes profit as the sole seller, then the economic outcome is:
A) inefficient because the monopoly has no incentive to be technically efficient. B) inefficient because the monopoly produces less than the optimal amount of output. C) Both A and B are correct. D) none of the above