Test Bank for Introduction to Econometrics 4th Edition by James H. Stock, Mark W. Watson

Introduction to Econometrics 4th Edition by James Stock and Mark Watson. ISBN-. Chapters 1-19
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, Introduction to Econometrics 4th Edition by James Stock and Mark Watson. ISBN-. Chapters 1-19
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Introduction to Econometrics, 4e (Stock/Watso
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n)Chapter 1 Economic Questions and Data
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1.1 Multiple Choice Questions nw nw




1) Analyzing the behavior of unemployment rates across U.S. states in March of 2006
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is anexample of using:
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A) time series data.nw nw




B) panel data. nw




C) cross-sectional data. nw




D) experimental data nw




.Answer: C
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2) Studying inflation in the United States from 1970 to 2006 is an example of using:
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A) randomized controlled experiments. nw nw




B) time series data.nw nw




C) panel data. nw




D) cross-
sectional data.Answer: nw nw




n w B


3) Analyzing the effect of minimum wage changes on teenage employment across th
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e 48contiguous U.S. states from 1980 to 2004 is an example of using:
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A) time series data.nw nw




B) panel data. nw




C) having a treatment group vs. a control group, since only teenagers receive minimum wages
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.
D) cross-
sectional data.Answer: nw nw




n w B


4) Panel data: nw




A) is also called longitudinal data.
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B) is the same as time series data.
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, Introduction to Econometrics 4th Edition by James Stock and Mark Watson. ISBN-. Chapters 1-19
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C) studies a group of people at a point in time.
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D) typically uses control and treatment group nw nw nw nw nw




s.Answer: A
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5) Econometrics can be defined as follows with the exception of: nw nw nw nw nw nw nw nw nw




A) the science of testing economic theory.
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B) fitting mathematical economic models to real-world data.
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C) a set of tools used for forecasting future values of economic variables.
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D) measuring the height of economist nw nw nw nw




s.Answer: D
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6) To provide quantitative answers to policy questions:
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A) it is typically sufficient to use common sense.
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B) you should interview the policy makers involved.
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C) you should examine empirical evidence.
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D) is typically impossible since policy questions are not quantifia
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ble.Answer: Cw
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7) An example of a randomized controlled experiment is when:
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A) households receive a tax rebate in one year but not the other.
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B) one U.S. state increases minimum wages and an adjacent state does not,
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andemployment differences are observed.
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C) random variables are controlled for by holding constant other factors.
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D) some 5th graders in a specific elementary school are allowed to use computers at s
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choolwhile others are not, and their end-of-
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year performance is compared holding constant otherfactors.
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Answer: D n w




8) Ideal randomized controlled experiments in economics are:
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A) often performed in practice. nw nw nw




B) often used by the Federal Reserve to study the effects of monetary policy.
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C) useful because they give a definition of a causal effect.
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D) sometimes used by universities to determine who graduates in four years rather
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thanfive. Answer: C
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9) Most economic data are obtained:
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A) through randomized controlled experiments.
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, Introduction to Econometrics 4th Edition by James Stock and Mark Watson. ISBN-. Chapters 1-19
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B) by calibration methods.
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C) through textbook examples typically involving ten observation points.
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D) by observing real- nw nw




world behavior.Answer: D
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10) One of the primary advantages of using econometrics over typical results from econ
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omictheory, is that:
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A) it potentially provides you with quantitative answers for a policy problem rather than si
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mplysuggesting the direction (positive/negative) of the response.
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B) teaching you how to use statistical packages
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C) learning how to invert a 4 by 4 matrix. nw nw nw nw nw nw nw nw




D) all of the abov nw nw nw




e.Answer: A
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11) In a randomized controlled experiment:
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A) there is a control group and a treatment group.
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B) you control for the effect that random numbers are not truly randomly generated
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C) you control for random answers
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D) the control group receives treatment on even days on
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ly.Answer: A
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12) The reason why economists do not use experimental data more frequently is for all
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of thefollowing reasons EXCEPT that real-world experiments:
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A) cannot be executed in economics. nw nw nw nw




B) with humans are difficult to administer.
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C) are often unethical.nw nw




D) have flaws relative to ideal randomized controlled experimen
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ts.Answer: A
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13) The most frequently used experimental or observational data in econometrics are of
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thefollowing type:
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A) cross-sectional data. nw




B) randomly generated data. nw nw




C) time series data. nw nw




D) panel data nw




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