1. Say whether you think each of the following statements are true or false, giving a one sentence justification for your answer. Marks will only be given for a correct answer with justification. Consider the linear model with k regressors, including a constant y = X'B + E, where it is known that plim X'e #0 (n denotes sample size). Suppose the columns of the matrix Z contain mk instruments, including a constant, such that plim Z'e = 0, plim/Z'X=Qzx, a matrix of rank k, and plim Z'Z Qzz, a matrix of rank m. Let X and denote the fitted values from regressing the columns of X and y respectively on Z. Which of the following will give consistent estimates of 3 ? = (a) (X'X)-X'y. (b) (X'X)-X'. (c) (Z'X) Z'y. (d) (Z'X)-X'y. (e) (X'X)-X'