Economics · Econometrics
Which of the following statements are true concerning a triangular or recursive system of equations?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The parameters can be validly estimated using separate applications of OLS to each equation because error terms across equations are independent.✓
- 2The independent variables are always correlated with the error terms in other equations.
- 3An application of two-stage least squares is mandatory to achieve unbiased and efficient parameter estimation.
- 4The error terms of the distinct equations are mutually uncorrelated, meaning the disturbance in one equation does not affect another.
Correct answer
The parameters can be validly estimated using separate applications of OLS to each equation because error terms across equations are independent.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Econometrics MCQs →Want more practice questions on Econometrics?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Econometrics