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QUESTION

Endogeneity : Reduced Form : For each of the following system of equations:

A.  Endogeneity:

1.    Reduced Form: For each of the following system of equations:

·  Determine which equations are over, under or exactly identified

·  Provide the reduced form for each equation (after substituting one equation into the other equation)

·  For identified parameters, provide the function based on the OLS estimated parameters.

· Assume that Zi and Wi are exogenous.

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