A pattern in the coefficients of the time fixed effects binary variables may reveal the following in a study of the determinants of state unemployment rates using panel data:
A)macroeconomic effects, which affect all states equally in a given year.
B)attitude differences towards unemployment between states.
C)there is no economic information that can be retrieved from these coefficients.
D)regional effects, which affect all states equally, as long as they are a member of that region.

Question

Quizplus · Accepted Answer

The pattern in the coefficients of the time fixed effects binary variables indicates macroeconomic effects that affect all states equally in a given year. This could include national economic conditions, changes in federal policies, or global economic trends that impact all states uniformly.

A Pattern in the Coefficients of the Time Fixed Effects