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Question: 1. Explain the meaning of each of the following terms.
(a) Endogenous variables.
(b) Exogenous variables.
(c) Structural equations.
(d) Reduced-form equations.
(e) Order condition for identification.
(f) Rank condition for identification.
(g) Indirect least squares.
(h) Two-stage least squares.
(i) Instrumental variable methods.
(j) Normalization.
(k) Simultaneity bias.
(I) Recursive systems.
2. Explain concisely what is meant by "the identification problem" in the context of the linear simultaneous equations model.
Part 2: In this part we will again be multiplying two functions and calculating the Fourier Transform of the product. The first function is y1(t) = cos(20πt).
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