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Basic Econometrics, Gujarati and Porter CHAPTER 1: THE NATURE OF REGRESSION ANALYSIS 1.1 (a) These rates (%) are as follows. They are year-over-year, starting with 1981. USA Canada Japan France Germany Italy UK 1980 1981 10.32 12.48 4.84 13.28 6.34 […]

Basic Econometrics, Gujarati and Porter CHAPTER 10: MULTICOLLINEARITY: WHAT HAPPENS IF THE REGRESSORS ARE CORRELATED? 10.1 If X k is a perfect linear combination of the remaining explanatory variables, then there are (k-1) equations with k unknowns. With more unknowns […]

Basic Econometrics, Gujarati and Porter 127 CHAPER 11: HETEROSCEDASTICITY: WHAT HAPPENS WHEN ERROR VARIANCE IS NONCONSTANT? 11.1 (a) False. The estimators are unbiased but are inefficient. 11.2 (a) As equation (1) shows, as N increases by a unit, on average, […]

Basic Econometrics, Gujarati and Porter 144 CHAPTER 12: AUTOCORRELATION: WHAT HAPPENS IF THE ERROR TERMS ARE CORRELATED? 12.1 (a) False. The estimators are unbiased but they are not efficient. 12.2 For n = 50 and k‘ = 4, and α […]

Basic Econometrics, Gujarati and Porter CHAPTER 13: ECONOMETRIC MODELING: MODEL SPECIFICATION AND DIAGNOSTIC TESTING 13.1 Since the model appears to be grounded in economic theory, it seems to be well specified. However, the price variables are strongly correlated and could […]

Basic Econometrics, Gujarati and Porter 168 CHAPTER 14: NONLINEAR REGRESSION MODELS 14.1 If a regression model superficially looks nonlinear in the parameters but with suitable transformations can be linearized in the 14.2 If the error term is entered additively, the […]

Basic Econometrics, Gujarati and Porter CHAPTER 15: QUALITATIVE RESPONSE REGRESSION MODELS 15.1 The regression results based on dropping the 12 observations are: 1 ˆ1.246 0.120 ( 10.332) (17.454) i i i i X Y w w t = − + […]

Basic Econometrics, Gujarati and Porter 182 CHAPTER 16: PANEL DATA REGRESSION MODELS 16.1 In cross-sectional data we gather information about several microunits at the same point in time. It is generally assumed that 16.2 In a fixed effects model (FEM) […]

Basic Econometrics, Gujarati and Porter CHAPTER 17: DYNAMIC ECONOMETRIC MODELS: AUTOREGRESSIVE AND DISTRIBUTED-LAG MODELS 17.1 (a) False. Econometric models are dynamic if they portray the time path of the dependent variable in relation to its past values. Models using cross-sectional […]

Basic Econometrics, Gujarati and Porter 203 CHAPTER 18: SIMULTANEOUS-EQUATI0N MODELS 18.1 The number of dentists demanded would be a function of the price of dental care, the income of the patient population, the availability of dental insurance, the level of […]

Basic Econometrics, Gujarati and Porter 207 CHAPTER 19: THE IDENTIFICATION PROBLEM 19.1 Using the definitions of M, m, K, and k, and letting R equal the number of variables (endogenous as well as predetermined) 19.2 The structural coefficients are: 0 […]

Basic Econometrics, Gujarati and Porter CHAPTER 2: TWO-VARIABLE REGRESSION ANALYSIS: SOME BASIC IDEAS 2.1 It tells how the mean or average response of the sub-populations of Y varies with the fixed values of the explanatory variable (s). 2.2 The distinction […]

Basic Econometrics, Gujarati and Porter CHAPTER 20: SIMULTANEOUS-EQUATION METHODS 20.1 (a) False. OLS can be used in the recursive systems. (b) True. If an equation is not identified, no method will provide estimates of the structural parameters. (c) True. (d) […]

Basic Econometrics, Gujarati and Porter CHAPTER 21: TIME SERIES ECONOMETRICS: SOME BASIC CONCEPTS 21.1 A stochastic process is said to be weakly stationary if its mean and variance are constant over time and if the value of the covariance between […]

Basic Econometrics, Gujarati and Porter 227 CHAPTER 22: TIME SERIES ECONOMETRICS: FORECASTING 22.1 As discussed in Sec. 22.1, broadly speaking there are five 22.2 Simultaneous-equation (SE) economic forecasting is based on a system of equations (composed of at least two […]

Basic Econometrics, Gujarati and Porter 17 CHAPTER 3: TWO-VARIABLE REGRESSION MODEL: THE PROBLEM OF ESTIMATION 3.1 (1) Y i = 1 2 i i X u β β + + . Therefore, E(Y i i X ) = E[( 1 […]

Basic Econometrics, Gujarati and Porter 30 CHAPTER 4: CLASSICAL NORMAL LINEAR REGRESSION MODEL (CNLRM) Appendix 4A Exercises 4.1 Given that the coefficient of correlation between Y 1 and Y 2 , ρ , is zero, the bivariate normal PDF reduces […]

Basic Econometrics, Gujarati and Porter 33 CHAPTER 5: TWO-VARIABLE REGRESSION: INTERVAL ESTIMATION AND HYPOTHESIS TESTING Questions 5.1 (a) True. The t test is based on variables with a normal distribution. (b) True. So long as E(u i ) = 0, […]

Basic Econometrics, Gujarati and Porter 48 CHAPTER 6: EXTENSIONS OF THE TWO-VARIABLE LINEAR REGRESSION MODEL 6.1 True. Note that the usual OLS formula to estimate the intercept is 6.2 ( a ) & ( b ) In the first equation […]

Basic Econometrics, Gujarati and Porter 61 7.1 The regression results are: 1 2 ˆ ˆ 3.00; 3.50 α α = − = 1 2 1 2 3 ˆ ˆ 4.00; 1.357 ˆˆˆ 2.00; 1.00; 1.00 λ λ β β β […]

Basic Econometrics, Gujarati and Porter 71 CHAPTER 8: MULTIPLE REGRESSION ANALYSIS: THE PROBLEM OF INFERENCE 8.1 (a) In the first model, where sales is a linear function of time, the (b) The simplest thing to do is plot Y against […]

Basic Econometrics, Gujarati and Porter 91 CHAPTER 9: DUMMY VARIABLE REGRESSION MODELS 9.1 (a) If the intercept is present in the model, introduce 11 dummies. 9.2 (a) As per economic theory, the coefficients of X 2 , X 5 are […]