Which of the following assumptions is known as exclusion restrictions?
A) The assumption that an instrumental variable is excluded from a regression model and is correlated with the error term.
B) The assumption that an instrumental variable is excluded from a regression model and is correlated with an exogenous explanatory variable.
C) The assumption that an exogenous explanatory variable is excluded from a regression model and is uncorrelated with the error term.
D) The assumption that an endogenous explanatory variable excluded from a regression model and is uncorrelated with the error term.
Correct Answer:
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