Which of the following is a disadvantage of the fixed effects approach to estimating a panel model?
(A)The model is likely to be technical to estimate (B)The approach may not be valid if the composite error term is correlated with one or more of the explanatory variables (C)The number of parameters to estimate may be large, resulting in a loss of degrees of freedom (D)The fixed effects approach can only capture cross-sectional heterogeneity and not temporal variation in the dependent variable.
C