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 that can be estimated and used for inference.
c.) misspecified due to missing information.
d.) heteroskedastic since error terms are no longer random.
What is the null hypothesis for a Hausman test for endogeneity?
a.) cov (z,x) > 0
b.) cov(x,e) > 0
c.) cov(x,e) = 0
d.) e is normally distributed
Which of the following is equivalent to L3yt?
a.) y t-3
b.) 3L2y t
c.) Lyt L2yt
d.) Ly3
t
What does VEC abbreviate?
a.) vector error correction
b.) variable error correction
c.) vector economic cointegration
d.) variable econometric condition
You want to test the hypothesis
What test statistic should you use for the test?
a.)
b.)
c.)
d.)
In an economic model that uses income to predict monthly expenditures on
entertainment, what is the independent or explanatory variable?
a.) income
b.) monthly expenditures on entertainment
c.) income elasticity
d.) demand for entertainment
You have estimated the following simple regression model
y = 379 + 1.44 x3
What is the elasticity when x = 8.49?
a.) 263.19
b.) 311.39
c.) 2.10
d.) -24.7
If the assumption that cov(x,e) = 0 is not true, what are the implications of least squares
estimators?
a.) still BLUE for all sample sizes
b.) consistent and normally distributed in very large sample sizes
c.) unbiased, but not BLUE for small samples
d.) inconsistent; parameter estimates do not converge to true values regardless of
sample size.
The matrix below represents the variance-covariance matrix estimated from the
multiple regression model:
Which element of the matrix cannot be negative?
a.) A
b.) B
c.) C
d.) D
The Chow test is a specific application of a(n)
a.) z-test
b.) 2test
c.) F-test
d.) t-test
If N is the number of individuals observed in each of T time periods, what is generally
true of a “long, narrow” panel?
a.) T > N
b.) N > T
c.) N = T
d.) N1/2 < T2
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, and
standard errors are listed below the parameter estimates.
What is the income elasticity of your firm’s product?
a.) 1.212
b.) 2.206
c.) 3.418
d.) 4.630