Simultaneous equations bias is a situation where
A) There is a two-way causal relationship between the explanatory and explained variable
B) There is a two-way causal relationship between two selected explanatory variables
C) There is a two-way causal relationship between two selected independent variables
D) There is a two-way causal relationship between the residuals of two regression models

Question

Quizplus · Accepted Answer

Simultaneous equations bias occurs when there is a two-way causal relationship between the explanatory (independent) and explained (dependent) variable, leading to biased and inconsistent estimates if not properly addressed.

Simultaneous Equations Bias Is a Situation Where