Econometrics Final Exam UPDATED
ACTUAL QUESTIONS AND CORRECT
ANSWERS
The u term in an econometric model is usually referred to as the _____. - Correct
answers✔✔error term
If xi and yi are positively correlated in the sample, then the estimated slope is _____ - Correct
answers✔✔greater than zero
All of the following are ways to reduce Var(𝛽 ̂ 𝑗) EXCEPT - Correct answers✔✔Reduce the
degrees of freedom
The parameters of an econometric model _____. - Correct answers✔✔refer to the unknown
values that describe a population relationship
Consider the following regression model: 𝑦 = 𝛽0 + 𝛽1𝑥1 + 𝑢. Which of the following is a
property of Ordinary Least Square (OLS) estimates of this model and their associated statistics? -
Correct answers✔✔The point (𝑥̅, 𝑦 )̅ always lies on the OLS regression line
In the equation, 𝑦 = 𝛽0 + 𝛽1𝑥1 + 𝛽2𝑥2 + 𝑢. What does 𝛽1 imply? - Correct
answers✔✔𝛽1measures the ceteris paribus effect of 𝑥1 on 𝑦.
Data on the income of law graduates collected in a particular year is _____. - Correct
answers✔✔cross-sectional data
The error term in a regression equation is said to exhibit homoskedasticty if _____. - Correct
answers✔✔it has the same variance for all values of the explanatory variable
ACTUAL QUESTIONS AND CORRECT
ANSWERS
The u term in an econometric model is usually referred to as the _____. - Correct
answers✔✔error term
If xi and yi are positively correlated in the sample, then the estimated slope is _____ - Correct
answers✔✔greater than zero
All of the following are ways to reduce Var(𝛽 ̂ 𝑗) EXCEPT - Correct answers✔✔Reduce the
degrees of freedom
The parameters of an econometric model _____. - Correct answers✔✔refer to the unknown
values that describe a population relationship
Consider the following regression model: 𝑦 = 𝛽0 + 𝛽1𝑥1 + 𝑢. Which of the following is a
property of Ordinary Least Square (OLS) estimates of this model and their associated statistics? -
Correct answers✔✔The point (𝑥̅, 𝑦 )̅ always lies on the OLS regression line
In the equation, 𝑦 = 𝛽0 + 𝛽1𝑥1 + 𝛽2𝑥2 + 𝑢. What does 𝛽1 imply? - Correct
answers✔✔𝛽1measures the ceteris paribus effect of 𝑥1 on 𝑦.
Data on the income of law graduates collected in a particular year is _____. - Correct
answers✔✔cross-sectional data
The error term in a regression equation is said to exhibit homoskedasticty if _____. - Correct
answers✔✔it has the same variance for all values of the explanatory variable
