Econometrics Exam Prep 2026/2027 |
Complete Study Guide
Dependent Variable - correct answer-a variable (often denoted by y ) whose value
depends on that of another. This is on the left hand side in the econometric
method
Econometric Model - correct answer-An econometric model specifies the
statistical relationship that is believed to hold between the various economic
quantities pertaining to a particular economic phenomenon under study
Constant - correct answer-y = b1 + b2x + ei : b1 is the constant
Econometric Method - correct answer-1.Formulate a theory about how the
variables should be related
2. Write down the function relating the variables. this is the econometric model
3. Estimate the relationship between the variables using the appropriate
statistical methods
4. Interpret and communicate the results
Independent variable - correct answer-y = b1 + b2x + ei: The independent variable
is x
, Random Error - correct answer-y = b1 + b2x + ei: The random error is ei
Residual - correct answer-y = b1 + b2x + ei: The residual is the difference between
yi and y estimate. E = yi - y^
Parameter - correct answer-y = b1 + b2x + ei: This is b1 and b2
Least Squares Regression - correct answer-This is the method we use to estimate
b1 and b2
Statistical Inference - correct answer-This is the process of deducing properties of
an underlying distribution by analysis of data
Micro Data - correct answer-This describes individual, households or firms
Macro Data - correct answer-This describes cities, states, counties or countries:
Basically aggregate data
Time Series Data - correct answer-This is when the data set is small (1) and the
time period is large N=1; T=large (US GDP, closing price of stock, balance in a bank
account)
Cross-Sectional Data - correct answer-This is when the data set is large and the
time period is small. N=large; T=1 (household survey, test scores)
Complete Study Guide
Dependent Variable - correct answer-a variable (often denoted by y ) whose value
depends on that of another. This is on the left hand side in the econometric
method
Econometric Model - correct answer-An econometric model specifies the
statistical relationship that is believed to hold between the various economic
quantities pertaining to a particular economic phenomenon under study
Constant - correct answer-y = b1 + b2x + ei : b1 is the constant
Econometric Method - correct answer-1.Formulate a theory about how the
variables should be related
2. Write down the function relating the variables. this is the econometric model
3. Estimate the relationship between the variables using the appropriate
statistical methods
4. Interpret and communicate the results
Independent variable - correct answer-y = b1 + b2x + ei: The independent variable
is x
, Random Error - correct answer-y = b1 + b2x + ei: The random error is ei
Residual - correct answer-y = b1 + b2x + ei: The residual is the difference between
yi and y estimate. E = yi - y^
Parameter - correct answer-y = b1 + b2x + ei: This is b1 and b2
Least Squares Regression - correct answer-This is the method we use to estimate
b1 and b2
Statistical Inference - correct answer-This is the process of deducing properties of
an underlying distribution by analysis of data
Micro Data - correct answer-This describes individual, households or firms
Macro Data - correct answer-This describes cities, states, counties or countries:
Basically aggregate data
Time Series Data - correct answer-This is when the data set is small (1) and the
time period is large N=1; T=large (US GDP, closing price of stock, balance in a bank
account)
Cross-Sectional Data - correct answer-This is when the data set is large and the
time period is small. N=large; T=1 (household survey, test scores)
