ECN 410 Practice Exam 3 Questions and Answers A+ Graded (2025).

ECN 410 Practice Exam 3 Questions
and Answers A+ Graded (2025)




Referred .to .output .a .and .your .knowledge .in .order .to .answer .the .question: .least
.squares .estimates .are .still .blue .- .CORRECT .ANSWER-False .


density .and .income .are .not .included .in .the .model, .they .become .correlated
.error, .increasing .SE .of .the .regression .(variance) .and .the .coefficients .become
.biased


Consider .the .following .fitted .regression .model: .
square .root .miles .= .8.24 .+ .0.23 .income .+ .0.24 .age .- .1.13 .kids
the .correct .interpretation .is: .an .increase .of .$1000 .in .income, .will .increase .on
.average, .square .root .of .230 .miles .or .15.16 .miles, .holding .everything .else
.constant .- .CORRECT .ANSWER-True .


straight .from .the .slides .(endogeneity .lecture)

In .the .study .of .28 .industrial .establishments .of .of .varying .size, .the .number .of
.supervised .workers .X .and .the .number .of .supervisors .y .were .recorded. .A
.regression .model .was .developed .to .investigate .the .relationship .between .Y .and
.X. .use .output .C .to .answer .the .question: .which .classical .assumption .was
.violated?
1) .the .regression .model .is .linear .is .correctly .specified .and .has .a .additive .error
.term
2) .the .error .term .has .zero .population .mean .
3) .the .error .term .has .a .constant .various .(homogeneous .variance)
4) .the .error .term .is .normally .distributed .
5) .all .explanatory .variables .are .uncorrelated .with .the .error .term .(no
.endogeneity) .- .CORRECT .ANSWER-3) .the .error .term .has .a .constant .variance .(
.homogenous .variance)


1) .(No .violation .of .CA. .The .Lack .of .Fit .test .showed .a .linear .relationship.)
2) .(No .violation .of .CA. .The .SAS .output .shows .the .mean .of .residuals .= .0)
3) .(True. .The .hypothesis .of .constant .variance .was .rejected.)

, 4) .(No .violation .of .CA. .Normality .tests .showed .p-values .> .0.05.)
5) .(True, .even .though .there .is .no .correlation .output, .the .data .contains .only .Y
.and .X, .therefore, .including .X .in .the .regression .model .eliminates .any
.specification .bias.)


Referred .to .output .A .and .your .knowledge .in .order .to .answer .the .question: .All
.the .explanatory .variables .are .uncorrelated .with .the .error .term .(use .a .= ..10) .-
.CORRECT .ANSWER-False .


both .income .and .density .are .correlated .with .the .error .term

We .would .always .like .to .reject .the .null .hypothesis .when .testing .for .normality .of
.the .errors .- .CORRECT .ANSWER-False


Use .output .C .to .answer .the .question .about .the .residuals:
1) .the .plot .are .the .residuals .versus .X .shows .that .the .residual .variance .tends .to
.decrease .with .X
2) .the .residuals .tend .to .lie .in .a .band .that .diverges .as .one .of .those .along .the .x-
axis
3) .because .the .band .within .which .the .residuals .lie .diverges .as .X .increases .the
.error .variance .is .also .increasing .with .x
4) .a .plot .of .the .residuals .against .the .predictor .variable .points .up .of .the .the
.presence .of .heteroskedastity .errors
5) .evidence .that .we .need .to .transform .the .dependent .variable .to .fix .the
.regression .model .- .CORRECT .ANSWER-Only .1 .is .false .


(The .plot .of .the .residuals .versus .X .shows .that .the .residual .variance .tends .to
.increase .with .X)


When .a .researcher .leaves .important .independent .variables .out .of .the
.regression .equation, .the .estimates .are .not .BLUE .anymore .- .CORRECT
.ANSWER-True


Using .SAS .output .B .which .of .the .classical .assumptions .were .tested .
1) .multicollinearity
2) .normality .of .the .errors
3) .linearity .
4) .e=0 .- .CORRECT .ANSWER-Only .1 .is .false

BLUE .means .best .linear .untransformed .estimators .- .CORRECT .ANSWER-False

When .testing .for .normality, .SAS .output .give .3 .goodness .of .fit .tests. .The
.decision .is .based .on .when .the .majority .reach .agreement .- .CORRECT .ANSWER-
True

When .a .researcher .leaves .important .independent .variable(s) .out .of .the
.regression .equation .he .or .she .violates .the .following .classical .assumption:
observations .of .the .error .term .are .uncorrelated .with .each .other .- .CORRECT
.ANSWER-True