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The Rank Condition for Identification of a Structural Equation States

Question 19

Multiple Choice

The rank condition for identification of a structural equation states that the first equation in a two-equation simultaneous equations model is identified if, and only if:


A) the first equation contains at least one exogenous variable (with a nonzero coefficient) that is excluded from the second equation.
B) the first equation contains at least two exogenous variables (with a nonzero coefficient) that are excluded from the second equation.
C) the second equation contains at least one exogenous variable (with a nonzero coefficient) that is excluded from the first equation.
D) the second equation contains at least two exogenous variables (with a nonzero coefficient) that are excluded from the first equation.

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