Consider the equation, y = a + B1x1 + B2x2 + u. A null hypothesis, Ho: B2 = 0 states that:

x2 has no effect on the expected value of y

The significance level of a test is:

the probability of rejecting the null hypothesis when it is true

Which of the following is true of standard error?

It is an estimate of the standard deviation.

In a regression model, which of the following will be described using a binary variable?

Whether it rained on a particular day or it did not

Econometrics is the branch of economics that

develops and uses statistical methods for estimating economic relationships

Which of the following is true of dummy variables?

A dummy variable takes a value of 0 or 1.

Two equations form a nonnested model when:

neither equation is a special case of the other.

Which of the following models is used quite often to capture decreasing or increasing marginal effects of a variable?

Models with quadratic functions

Consider the following regression equation: y = Bo + B1 +..... +Bk xk +u. InWhat case is the dependent variable binary?

y indicates whether an adult is a college dropout

Which of the following is true of dependent variables?

A dependent variable can be binary.

Which of the following Gauss-Markov assumptions is violated by the linear probability model?

The assumption of constant variance of the error term.

Which of the following statements is true?

The F statistic is always nonnegative as SSR, is never smaller than SSRur

If the model y = Bo +B1x1 + B2x2+v satisfies the first four Gauss-Markov assumptions, then v has:

a zero mean and is uncorrelated with x and x2.

Consider the following regression equation: y = Bo+B1x1+B2x2+ u. What does B imply?

B measures the ceteris paribus effect of X1 on y

Which of the following is true of experimental data?

Experimental data collected in laboratory environment in the natural scienc

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P-Hat Final Exam

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Questions 34

Answers

1
The value of R2 always
lies between 0 and 1
lies between 1 and 1.5
lies below 0
lies above 1
2
Which of the following tools is used to test multiple linear restrictions?
Unit root test
t test
Z Test
F test
3
If x, and y, are positively correlated in the sample then the estimated slope is
equal to one
less than zero
equal to zero
greater than zero
4
Consider the equation, y = a + B1x1 + B2x2 + u. A null hypothesis, Ho: B2 = 0 states that:
x2 has no effect on the expected value of y
x2 has no effect on the expected value of B2.
y has no effect on the expected value of x2.
B2 has no effect on the expected value of y
5
What does the equation = B+Bx denote if the regression equation is y = B0 + B1 x1 + u?
The explained sum of squares
The total sum of squares
The sample regression function
The population regression function
6
The significance level of a test is:
the probability of rejecting the null hypothesis when it is true
one minus the probability of rejecting the null hypothesis when it is true
one minus the probability of rejecting the null hypothesis when it is false
the probability of rejecting the null hypothesis when it is false
7
Which of the following is true of standard error?
It complicates the computation of confidence intervals
It is an estimate of the standard deviation.
It is the square root of the variance.
It can take negative values.
8
High (but not perfect) correlation between two or more independent variables is called
heteroskedasticty
micronumerosity
multicollinearity
homoscedasticity
9
Nonexperimental data is called
panel data
observational data
cross-sectional data
time series data
10
A dependent variable is also known as a(n)
predictor variable
response variable
control variable
explanatory variable
11
Exclusion of a relevant variable from a multiple linear regression model leads to the problem of
homoskedasticity
misspecification of the model
multicollinearity
. perfect collinearity
12
In a regression model, which of the following will be described using a binary variable?
The percentage of humidity in air on a particular day
The volume of rainfall during a year
Whether it rained on a particular day or it did not
The concentration of dust particles in air
13
Econometrics is the branch of economics that
develops and uses statistical methods for estimating economic relationships
?
?
studie the behavior of individual economic agents in makingeconomicdecision
14
. If a change in variable x causes a change in variable y, variable x is called the ___
response variable
explained variable
explanatory variable
dependent variable
15
If the explained sum of squares is 35 and the total sum of squares is 49, what is the residual sum of squares?
10
18
14
12
16
Which of the following is true of dummy variables?
A dummy variable takes a value of 1 or 10
A dummy variable always takes a value higher than 1
A dummy variable always takes a value less than 1.
A dummy variable takes a value of 0 or 1.
17
The sample correlation between x; and y; is denoted by
O^y
P^xy
B^1
O^x
18
Two equations form a nonnested model when:
here is only one independent variable in both equations
each equation has the same independent variables.
one is logarithmic and the other is quadratic.
neither equation is a special case of the other.
19
In the equation y = Bo+B1x+u, B is the ___
independent variable
slope parameter
intercept parameter
dependent variable
20
Which of the following models is used quite often to capture decreasing or increasing marginal effects of a variable?
Models with quadratic functions
Models with logarithmic functions
Models with variables in level
Models with interaction terms
21
A ____ variable is used to incorporate qualitative information in a regression model.
dummy
dependent
continuous
binomial
22
An empirical analysis relies on to test a theory.
data
customs and conventions
ethical considerations
common sense
23
Consider the following regression equation: y = Bo + B1 +..... +Bk xk +u. InWhat case is the dependent variable binary?
y indicates the number of children in a family
y indicates whether an adult is a college dropout
y indicates the gross domestic product of a country
y indicates household consumption expenditure
24
Which of the following is true of dependent variables?
A dependent variable can be binary.
A dependent variable cannot have more than 2 values."
. A dependent variable cannot have a qualitative meaning.
A dependent variable can only have a numerical value.
25
If an indepen var in a multiple linear regresion model is an exact linear combination of other IP var model suffers from
omitted variable bias
perfect collinearity
homoskedasticity
heteroskedasticty
26
Which of the following Gauss-Markov assumptions is violated by the linear probability model?
The assumption of constant variance of the error term.
The assumption that none of the independent variables are constants.
The assumption of zero conditional mean of the error term
The assumption of no exact linear relationship among independent variables.
27
In the equation y= Bo +b1x1 + B2x2 +u B2 is an
dependent variable
independent variable
intercept parameter
slope parameter
28
Which of the following statements is true?
The F statistic is more flexible than the t statistic to test a hypothesis
The F statistic is always nonnegative as SSR, is never smaller than SSRur
Degrees of freedom of a restricted model is always less than the DOF unrest
29
If the error term is correlated with any of the independent variables, the OLS estimators are:
. unbiased and consistent.
biased and inconsistent.
biased and consistent.
unbiased and inconsistent.
30
The term 'u' in an econometric model is usually referred to as the __
error term
hypothesis
dependent variable
parameter
31
If the model y = Bo +B1x1 + B2x2+v satisfies the first four Gauss-Markov assumptions, then v has:
a zero mean and is correlated with only x2.
a zero mean and is correlated with only x1.
a zero mean and is uncorrelated with x and x2.
a zero mean and is correlated with x1 and x2.
32
The constants of econometric models are referred to as
parameters
error terms
hypotheses
statistics
33
Consider the following regression equation: y = Bo+B1x1+B2x2+ u. What does B imply?
B1 measures the ceteris paribus effect of X1 on U
B measures the ceteris paribus effect of X1 on y
B measures the ceteris paribus effect of y on X1.
B1 measures the ceteris paribus effect of X1 on X2
34
Which of the following is true of experimental data?
Experimental data is sometimes called observational data.
Experimental data collected in laboratory environment in the natural scienc
Experimental data cannot be collected in a controlled environment.
Experimental data is sometimes called retrospective data.

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