Question: 12.5 Consider the instrumental variable regression model Yi = b0 + b1Xi + b2Wi + ui, where Xi is correlated with ui and Zi is

12.5 Consider the instrumental variable regression model Yi = b0 + b1Xi + b2Wi + ui, where Xi is correlated with ui and Zi is an instrument. Suppose that the first three assumptions in Key Concept 12.4 are satisfied. Which IV assumption is not satisfied when:

a. Zi is independent of (Yi, Xi, Wi)?

b. Zi = Wi?

c. Wi = 1 for all i?

d. Zi = Xi?

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