(a) Consider the following set-up: at time 0, all students are in the same sized class, but in time 1 some students may choose to take a smaller class and some may take a larger class. This is essentially the example from class. Why might including t be important in this example? (b) Take the difference over time of Y and write the differenced regression. (c) Once the equation has been differenced, there is only one observation per individual. Since the time fixed effects do not vary over individuals, what is the role of the time fixed effects in the differenced regression? How does this setup compare to that in class