INTRODUCTION TO ECONOMETRICS FINAL PAPER FULL QUESTIONS AND CORRECT ANSWERS PREMIUM STUDY SHEET

INTRODUCTION TO ECONOMETRICS FINAL
PAPER FULL QUESTIONS AND CORRECT
ANSWERS PREMIUM STUDY SHEET

●● What is the mean of the sampling distribution of xbar?
Answer: population mean (mew)


●● What is the formula for the standard error of xbar when sigma is
know?
Answer: (sigma/sqrtn)


●● what happens to the standard error when sample size increases?
Answer: It lessens because the distribution becomes more normal


●● What does the central limit theorem guarantee?
Answer: for large n, sampling distributions are approximately normal.


●● why is the CLT important in econometrics?
Answer: it allows hypothesis testing and confidence intervals


●● when do we use the z distribution?
Answer: when sigma (population standard deviation) is known

, ●● when do we use the t distribution?
Answer: when sigma(population standard deviation) is unknown


●● what determines the shape of the t distribution?
Answer: degrees of freedom


●● what is the general formula for a confidence interval?
Answer: xbar +- critical value * (sigma/sqrtn)


●● what are the four components of a confidence interval?
Answer: estimate (xbar), standard error, critical value, margin of error


●● if sample size increases, what happens to the width of the CI?
Answer: narrows because more precision and less sampling variability,
the estimate is more tightly centered around the true parameter


●● what is the usual null hypothesis when testing a population mean?
Answer: H0 : mew = mew1


●● what is the decision rule when using a pvalue?
Answer: reject the null hypothesis because pval is less than the level of
significance (alpha)