|Consider the following simple regression model y= Bo + B1x1 + u and z is an instrument for x. Suppose x and z are both positively correlated with u and Corr(z,x) > 0. Then, the asymptotic bias in the...

Extracted text: |Consider the following simple regression model y= Bo + B1x1 + u and z is an instrument for x. Suppose x and z are both positively correlated with u and Corr(z,x) > 0. Then, the asymptotic bias in the IV estimator is less than that for OLS only if: a. Corr(z,u)/ Corr(z,x) = Corr(x,u). O b. Corr(z,u)/ Corr(z,x) < corr(x,u).="" o="" c.="" corr(z,u)/="" corr(z,x)="" #="" corr(x,u).="" o="" d.="" corr(z,u)/="" corr(z,x)=""> Corr(x,u).