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

12.5 Consider the IV 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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