ECONOMETRICS FINAL EXAM
QUESTIONS AND ANSWERS ALL
CORRECT
Which of the following is a statistic that can be used to test hypotheses about a single
population parameter?
a. F statistic
b. t statistic
c. χ2 statistic
d. Durbin Watson statistic - Answer- b. t statistic
Consider the equation, Y = β1 + β2X2 + u. A null hypothesis, H0: β2 = 0 states that:
a. X2 has no effect on the expected value of β2.
b. X2 has no effect on the expected value of Y.
c. β2 has no effect on the expected value of Y.
d. Y has no effect on the expected value of X2. - Answer- b. X2 has no effect on the
expected value of Y
The significance level of a test is:
a. the probability of rejecting the null hypothesis when it is false.
b. one minus the probability of rejecting the null hypothesis when it is false.
c. the probability of rejecting the null hypothesis when it is true.
d. one minus the probability of rejecting the null hypothesis when it is true. - Answer- c.
the probability of rejecting the null hypothesis when it is true.
The general t statistic can be written as:
a. t = (Hypothesized value)/(Standard error)
b. t = (estimate -hypothesized value)
c. t = ((estimate - hypothesized value) )/variance
d. t = ((estimate - hypothesized value) )/(standard error) - Answer- d. t = ((estimate -
hypothesized value) )/(standard error)
If the total sum of squares (SST) in a regression equation is 81, and the residual sum of
squares (SSR) is 25, what is the explained sum of squares (SSE)?
a. 64
b. 56
c. 32
d. 18 - Answer- b. 56
, If the residual sum of squares (SSR) in a regression analysis is 66 and the total sum of
squares (SST) is equal to 90, what is the value of the coefficient of determination?
a. 0.73
b. 0.55
c. 0.27
d. 1.2 - Answer- c. 0.27
Which of the following is a nonlinear regression model? a. y = β0 + β1x1/2 + u
b. log y = β0 + β1log x +u
c. y = 1 / (β0 + β1x) + u
d. y = β0 + β1x + u - Answer- c. y = 1 / (β0 + β1x) + u
Which of the following is assumed for establishing the unbiasedness of Ordinary Least
Square (OLS) estimates?
a. The error term has an expected value of 1 given any value of the explanatory
variable.
b. The regression equation is linear in the explained and explanatory variables.
c. The sample outcomes on the explanatory variable are all the same value.
d. The error term has the same variance given any value of the explanatory variable. -
Answer- d. The error term has the same variance given any value of the explanatory
variable.
In the equation, y=β_0+β_1 x_1+β_2 x_2+u, β_2 is a(n) _____.
a. independent variable
b. dependent variable
c. slope parameter
d. intercept parameter - Answer- c. slope parameter
Consider the following regression equation: y=β_1+β_2 x_1+β_2 x_2+u. What does β1
imply?
a.β_1 measures the ceteris paribus effect of x_1on x_2.
b. β_1 measures the ceteris paribus effect of y on x_1.
c. β_1 measures the ceteris paribus effect of x_1on y.
d. β_1 measures the ceteris paribus effect of x_1on u. - Answer- c. β_1 measures the
ceteris paribus effect of x_1on y.
If the explained sum of squares is 35 and the total sum of squares is 49, what is the
residual sum of squares?
a. 10
b. 12
c. 18
d. 14 - Answer- d. 14
Which of the following is true of R2?
a. R2 is also called the standard error of regression.
QUESTIONS AND ANSWERS ALL
CORRECT
Which of the following is a statistic that can be used to test hypotheses about a single
population parameter?
a. F statistic
b. t statistic
c. χ2 statistic
d. Durbin Watson statistic - Answer- b. t statistic
Consider the equation, Y = β1 + β2X2 + u. A null hypothesis, H0: β2 = 0 states that:
a. X2 has no effect on the expected value of β2.
b. X2 has no effect on the expected value of Y.
c. β2 has no effect on the expected value of Y.
d. Y has no effect on the expected value of X2. - Answer- b. X2 has no effect on the
expected value of Y
The significance level of a test is:
a. the probability of rejecting the null hypothesis when it is false.
b. one minus the probability of rejecting the null hypothesis when it is false.
c. the probability of rejecting the null hypothesis when it is true.
d. one minus the probability of rejecting the null hypothesis when it is true. - Answer- c.
the probability of rejecting the null hypothesis when it is true.
The general t statistic can be written as:
a. t = (Hypothesized value)/(Standard error)
b. t = (estimate -hypothesized value)
c. t = ((estimate - hypothesized value) )/variance
d. t = ((estimate - hypothesized value) )/(standard error) - Answer- d. t = ((estimate -
hypothesized value) )/(standard error)
If the total sum of squares (SST) in a regression equation is 81, and the residual sum of
squares (SSR) is 25, what is the explained sum of squares (SSE)?
a. 64
b. 56
c. 32
d. 18 - Answer- b. 56
, If the residual sum of squares (SSR) in a regression analysis is 66 and the total sum of
squares (SST) is equal to 90, what is the value of the coefficient of determination?
a. 0.73
b. 0.55
c. 0.27
d. 1.2 - Answer- c. 0.27
Which of the following is a nonlinear regression model? a. y = β0 + β1x1/2 + u
b. log y = β0 + β1log x +u
c. y = 1 / (β0 + β1x) + u
d. y = β0 + β1x + u - Answer- c. y = 1 / (β0 + β1x) + u
Which of the following is assumed for establishing the unbiasedness of Ordinary Least
Square (OLS) estimates?
a. The error term has an expected value of 1 given any value of the explanatory
variable.
b. The regression equation is linear in the explained and explanatory variables.
c. The sample outcomes on the explanatory variable are all the same value.
d. The error term has the same variance given any value of the explanatory variable. -
Answer- d. The error term has the same variance given any value of the explanatory
variable.
In the equation, y=β_0+β_1 x_1+β_2 x_2+u, β_2 is a(n) _____.
a. independent variable
b. dependent variable
c. slope parameter
d. intercept parameter - Answer- c. slope parameter
Consider the following regression equation: y=β_1+β_2 x_1+β_2 x_2+u. What does β1
imply?
a.β_1 measures the ceteris paribus effect of x_1on x_2.
b. β_1 measures the ceteris paribus effect of y on x_1.
c. β_1 measures the ceteris paribus effect of x_1on y.
d. β_1 measures the ceteris paribus effect of x_1on u. - Answer- c. β_1 measures the
ceteris paribus effect of x_1on y.
If the explained sum of squares is 35 and the total sum of squares is 49, what is the
residual sum of squares?
a. 10
b. 12
c. 18
d. 14 - Answer- d. 14
Which of the following is true of R2?
a. R2 is also called the standard error of regression.
