Which of the following statements are true concerning a recursive system ?

Posted by MCQ LOG at 6:47 PM

Which of the following statements are true concerning a recursive system ? 

(a) The parameters can be validly estimated using seperate application of OLS to each equation 

(b) The independent variables may be correlated with the error terms in other equations. 

(c) An application of 2SLS would lead to unbiased but  unefficient parameter estimates. 

(d) The independent variables may be correlated with error terms in the equations in which they appear as independent variables. 

(1) (b) and (d) only

(2) (a) and (c) only

(3) (a), (b) and (c) only

(4) (a), (b), (c) and (d)

Answer: (3) (a), (b) and (c) only