INTRODUCTION TO ECONOMETRICS TEST
BANK UPDATED SOLVED QUESTIONS AND
CORRECT ANSWERS FULL REVIEW GUIDE
●● Studying inflation in the United States from 1970 to 2010 is an
example of using...
Panel data
Cross-sectional data
Time series data
Randomized controlled experiments.
Answer: Correct answer:
Time series data
●● Analyzing the effect of minimum wage changes on teenage
employment across the 48 contiguous U.S. states from 1980 to 2010 is
an example of using...
a treatment group vs. a control group, since only teenagers receive
minimum wages.
Cross-sectional data.
,Panel data.
Time series data.
Answer: Correct answer:
Panel data
●● Econometrics can be defined as follows with the EXCEPTION of...
Fitting mathematical economics models to real-world data.
Economic data collection and accounting.
A set of tools used for forecasting future values of economic variables.
The science of testing economic theory.
Answer: Correct answer:
Economic data collection and accounting
●● To provide quantitative answers to policy questions...
It's typically sufficient to use common sense.
,You should examine empirical evidence.
You should interview the policy makers involved.
It's typically impossible since policy questions are not quantifiable.
Answer: Correct answer:
You should examine empirical evidence
●● An example of a randomized controlled experiment is when...
Households receive a tax rebate in one year but not the other.
Some 5th graders in a specific elementary school are allowed to use
computers at school while others are not, and their end-of-year
performance is compared holding other factors constant.
Random variables are controlled for by holding other factors constant.
One US state increases minimum wages and an adjacent state does not,
and employment differences are observed.
Answer: Correct answer:
, Some 5th graders in a specific elementary school are allowed to use
computers at school while others are not, and their end-of-year
performance is compared holding other factors constant.
●● Ideal randomized controlled experiments in economics are...
sometimes used by university to determine who graduate in four years
rather than five.
useful because they give a definition of causal effect.
often performed in practice.
often used by the Federal Reserve to study the effects of monetary
policy.
Answer: Correct answer:
useful because they give a definition of causal effect
●● One of the primary advantages of using econometrics over typical
results from economic theory, is that...
it potentially provides you with quantitative answers for a policy
problem rather than simply suggesting the direction (positive/negative)
of the response.
BANK UPDATED SOLVED QUESTIONS AND
CORRECT ANSWERS FULL REVIEW GUIDE
●● Studying inflation in the United States from 1970 to 2010 is an
example of using...
Panel data
Cross-sectional data
Time series data
Randomized controlled experiments.
Answer: Correct answer:
Time series data
●● Analyzing the effect of minimum wage changes on teenage
employment across the 48 contiguous U.S. states from 1980 to 2010 is
an example of using...
a treatment group vs. a control group, since only teenagers receive
minimum wages.
Cross-sectional data.
,Panel data.
Time series data.
Answer: Correct answer:
Panel data
●● Econometrics can be defined as follows with the EXCEPTION of...
Fitting mathematical economics models to real-world data.
Economic data collection and accounting.
A set of tools used for forecasting future values of economic variables.
The science of testing economic theory.
Answer: Correct answer:
Economic data collection and accounting
●● To provide quantitative answers to policy questions...
It's typically sufficient to use common sense.
,You should examine empirical evidence.
You should interview the policy makers involved.
It's typically impossible since policy questions are not quantifiable.
Answer: Correct answer:
You should examine empirical evidence
●● An example of a randomized controlled experiment is when...
Households receive a tax rebate in one year but not the other.
Some 5th graders in a specific elementary school are allowed to use
computers at school while others are not, and their end-of-year
performance is compared holding other factors constant.
Random variables are controlled for by holding other factors constant.
One US state increases minimum wages and an adjacent state does not,
and employment differences are observed.
Answer: Correct answer:
, Some 5th graders in a specific elementary school are allowed to use
computers at school while others are not, and their end-of-year
performance is compared holding other factors constant.
●● Ideal randomized controlled experiments in economics are...
sometimes used by university to determine who graduate in four years
rather than five.
useful because they give a definition of causal effect.
often performed in practice.
often used by the Federal Reserve to study the effects of monetary
policy.
Answer: Correct answer:
useful because they give a definition of causal effect
●● One of the primary advantages of using econometrics over typical
results from economic theory, is that...
it potentially provides you with quantitative answers for a policy
problem rather than simply suggesting the direction (positive/negative)
of the response.
