Question: Consider the following simple regression model y = 0 + 1 x + u , with z being an instrument for x . Suppose Corr(

Consider the following simple regression model y = 0 + 1x + u, with z being an instrument for x. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the IV estimator has a(n) _______.

a.

asymptotic bias
b.

downward bias
c.

no bias
d.

upward bias

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