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(See graphs of Model A – D) The scatterplots show the estimated residuals plotted against predicted values of the dependent variable. In which model is WLS LEAST likely to be an effective solution for the heteroskedasticity? a.) Model A b.) […]

When is a Tobit model used? a.) when you have censored data b.) for categorical data with a normally distributed error term c.) when you want to combine a probit and multinomial logit d.) to estimate varying marginal effects in […]

Which of the following non-linear adjustments CANNOT be accommodated using OLS? a.) including an independent variable that has been raised to a power b.) taking a logarithmic transformation of the dependent variable c.) including a binary indicator variable d.) raising […]

While working with the sales manager of your firm you have estimated the following model of sales volume as a function of monthly household income: (0.781) (0.392) Where Q is monthly sales volume, I is monthly household income in thousands, […]

When a set of variables with exact co linearity is included in an econometric model coefficient estimates are a.) undefined b.) unbiased c.) biased upward d.) biased, but the direction is unclear When an exogenous instrument is used, IV estimators […]

What type of model provides information about sources of volatility? a.) a VAR model b.) an impulse response function c.) variance decomposition d.) an ARDL model Unobservable variables that enter into decisions are called a.) latent variables b.) endogenous variables […]

Which type of model has coefficients that vary with i, but are constant with t? a.) pooled model b.) fixed effects c.) random effects d.) none of these Which of the following variables is most likely to be quantitative? a.) […]

The critical value for a given p-value in the F-distribution depends on the degrees of freedom in the numerator and denominator. How do you find the degrees of freedom in the numerator? a.) It is the number of observations minus […]

A data set that has observations on one entity at multiple points in time is classified as a). time series data b.) cross-section data c.) panel data d.) flow data What are reduced form equations in a system of equations? […]

Finite distributed lag models are most useful for a.) forecasting and economic policy analysis b.) testing hypotheses and measuring economic dynamics c.) measuring impacts and optimizing economic outcomes d.) measuring autocorrelation and autoregressive dynamics Applying the OLS model to our […]

What does R2, the coefficient of determination, measure? a.) the probability of the true value falling within the forecast interval b.) the p-value on the coefficient we are using to test our hypothesis of interest c.) the confidence interval of […]

What benefit is gained by estimating treatment effects with fixed effects using panel data? a.) it controls for unobserved, individual characteristics b.) it controls for changes in individuals over time c.) it allows the treatment effect to vary with the […]

If L is the number of exogenous instruments and B is the number of endogenous regressors in the model, when L = B the model is a.) just identified b.) over identified c.) under identified d.) precisely identified What mathematical […]

How do you interpret the estimated value of g1 in the following equation: where INCOME is annual household income (in thousands) and ENT_EXP is annual entertainment expenses? a.) the income elasticity of entertainment b.) when multiplied by 100 it is […]

You estimate a simple linear regression model using a sample of 25 observations and obtain the following results (estimated standard errors in parentheses below coefficient estimates): y = 97.25 + 19.74 *x (3.86) (3.42) You want to test the following […]

When an error term is added to an economic model and assumptions about the distribution of the error term are made, the resulting model is ______________. a.) fallacious, you should not make assumptions about error terms. b.) an econometric model […]

The expected value of a random variable is a.) the probability weighted mean b.) a measure of central tendency of the pdf c.) average value that occurs in many repeated trial of an experiment d.) all of the above The […]

Which of the following is not a common cause of endogeneity? a.) measurement error b.) simultaneous equations c.) omitted variables d.) continuous variables Which of these assumptions indicates homoskedasticity? a.) E(eit) = 0 b.) var(eit) = E(e2 it) = 2 […]

What is the null hypothesis when performing an F-test to test the strength of an instrument? a.) the instrument is weak, with no different from 0. b.) it is a strong instrument with all significantly different from 0. c.) the […]

(See graphs of Model A – D) The scatterplots show the estimated residuals plotted against predicted values of the dependent variable. Which model is LEAST likely to have violated the assumption var(yi) = var(ei) = 2? a.) Model A b.) […]