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
sx sx sx sx sx sx
L
sx sx sx sx sx sx sx




Test Bank
sx Page 1
sx

, Introduction to Econometrics 4th Edition by James Stock and Mark Watson. ISBN-. Chapters 1-19
sx sx sx sx sx sx sx sx sx sx sx sx sx




Introduction to Econometrics, 4e (Stock/Watson)
sx sx sx sx sx




Chapter 1 Economic Questions and Data
sx s x sx sx sx




1.1 Multiple Choice Questions sx sx




1) Analyzing the behavior of unemployment rates across U.S. states in March of 2006 is a
sx sx sx sx sx sx sx sx sx sx sx sx sx sx




nexample of using:
sx sx sx




A) time series data.
sx sx




B) panel data. sx




C) cross-sectional data. sx




D) experimental data sx




.Answer: C
sx s x




2) Studying inflation in the United States from 1970 to 2006 is an example of using:
sx sx sx sx sx sx sx sx sx sx sx sx sx sx




A) randomized controlled experiments. sx sx




B) time series data.
sx sx




C) panel data. sx




D) cross-
sectional data.Answer:sx sx




s x B


3) Analyzing the effect of minimum wage changes on teenage employment across the 4
sx sx sx sx sx sx sx sx sx sx sx sx




8contiguous U.S. states from 1980 to 2004 is an example of using:
sx sx sx sx sx sx sx sx sx sx sx sx




A) time series data.
sx sx




B) panel data. sx




C) having a treatment group vs. a control group, since only teenagers receive minimum wages.
sx sx sx sx sx sx sx sx sx sx sx sx sx




D) cross-
sectional data.Answer:sx sx




s x B


Test Bank sx Page 2
sx

, Introduction to Econometrics 4th Edition by James Stock and Mark Watson. ISBN-. Chapters 1-19
sx sx sx sx sx sx sx sx sx sx sx sx sx


4) Panel data: sx




A) is also called longitudinal data.
sx sx sx sx




B) is the same as time series data.
sx sx sx sx sx sx




C) studies a group of people at a point in time. sx sx sx sx sx sx sx sx sx




D) typically uses control and treatment groups sx sx sx sx sx




.Answer: A
sx s x




5) Econometrics can be defined as follows with the exception of: sx sx sx sx sx sx sx sx sx




A) the science of testing economic theory.
sx sx sx sx sx




B) fitting mathematical economic models to real-world data.
sx sx sx sx sx sx




C) a set of tools used for forecasting future values of economic variables.
sx sx sx sx sx sx sx sx sx sx sx




D) measuring the height of economists sx sx sx sx




.Answer: D
sx s x




6) To provide quantitative answers to policy questions:
sx sx sx sx sx sx




A) it is typically sufficient to use common sense.
sx sx sx sx sx sx sx




B) you should interview the policy makers involved.
sx sx sx sx sx sx




C) you should examine empirical evidence.
sx sx sx sx




D) is typically impossible since policy questions are not quantifiable
sx sx sx sx sx sx sx sx




.Answer: C
sx s x




7) An example of a randomized controlled experiment is when:
sx sx sx sx sx sx sx sx




A) households receive a tax rebate in one year but not the other. sx sx sx sx sx sx sx sx sx sx sx




B) one U.S. state increases minimum wages and an adjacent state does not, an
sx sx sx sx sx sx sx sx sx sx sx sx




demployment differences are observed.
sx sx sx sx




C) random variables are controlled for by holding constant other factors.
sx sx sx sx sx sx sx sx sx




D) some 5th graders in a specific elementary school are allowed to use computers at scho
sx sx sx sx sx sx sx sx sx sx sx sx sx sx




olwhile others are not, and their end-of-
sx sx sx sx sx sx sx




year performance is compared holding constant otherfactors.
sx sx sx sx sx sx sx




Answer: D s x




8) Ideal randomized controlled experiments in economics are:
sx sx sx sx sx sx




A) often performed in practice. sx sx sx




B) often used by the Federal Reserve to study the effects of monetary policy.
sx sx sx sx sx sx sx sx sx sx sx sx




C) useful because they give a definition of a causal effect.
sx sx sx sx sx sx sx sx sx




D) sometimes used by universities to determine who graduates in four years rather tha
sx sx sx sx sx sx sx sx sx sx sx sx




nfive. Answer: C
sx sx s x




Test Bank sx Page 3
sx

, Introduction to Econometrics 4th Edition by James Stock and Mark Watson. ISBN-. Chapters 1-19
sx sx sx sx sx sx sx sx sx sx sx sx sx




9) Most economic data are obtained:
sx sx sx sx




A) through randomized controlled experiments. sx sx sx




B) by calibration methods.
sx sx




C) through textbook examples typically involving ten observation points.
sx sx sx sx sx sx sx




D) by observing real- sx sx




world behavior.Answer: D
sx sx s x




10) One of the primary advantages of using econometrics over typical results from economi
sx sx sx sx sx sx sx sx sx sx sx sx




ctheory, is that:
sx sx sx




A) it potentially provides you with quantitative answers for a policy problem rather than simpl
sx sx sx sx sx sx sx sx sx sx sx sx sx




ysuggesting the direction (positive/negative) of the response.
sx sx sx sx sx sx sx




B) teaching you how to use statistical packages sx sx sx sx sx sx




C) learning how to invert a 4 by 4 matrix. sx sx sx sx sx sx sx sx




D) all of the above. sx sx sx sx




Answer: A s x




11) In a randomized controlled experiment:
sx sx sx sx




A) there is a control group and a treatment group.
sx sx sx sx sx sx sx sx




B) you control for the effect that random numbers are not truly randomly generated
sx sx sx sx sx sx sx sx sx sx sx sx




C) you control for random answers
sx sx sx sx




D) the control group receives treatment on even days only
sx sx sx sx sx sx sx sx




.Answer: A
sx s x




12) The reason why economists do not use experimental data more frequently is for all of t
sx sx sx sx sx sx sx sx sx sx sx sx sx sx sx




hefollowing reasons EXCEPT that real-world experiments:
sx sx sx sx sx sx




A) cannot be executed in economics. sx sx sx sx




B) with humans are difficult to administer.
sx sx sx sx sx




C) are often unethical.sx sx




D) have flaws relative to ideal randomized controlled experiments
sx sx sx sx sx sx sx




.Answer: A
sx s x




13) The most frequently used experimental or observational data in econometrics are of th
sx sx sx sx sx sx sx sx sx sx sx sx




efollowing type:
sx sx




A) cross-sectional data. sx




Test Bank sx Page 4
sx