Is it possible to apply the latent and observed variables in a model simultaneously?
Yes, it is possible. You can see a model in the following link in Kenny's web page.
http://davidakenny.net/img/am_mm.png
Yes, Structural Equasion Modelling is about that.
Yes, surely can with SEM. this is one of its advantages when you apply this method
Yes, I agree with Çınar Kaya for David A. Kenny's reference. Ricka Stoelting's webpage also has clear SEM examples using measured and latent variables.
Regards,
Dominique
http://userwww.sfsu.edu/efc/classes/biol710/path/SEMwebpage.htm
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