Winter 2005 - Jeon's Class - Exam 1

Winter 2005 - Jeon's Class - Exam 1 - Economics 120B Name...

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Unformatted text preview: Economics 120B Name: _________________________ Professor Yongil Jeon February 3, 2005 Student ID#: _________________________ Exam 1: Econometrics 120B 1. (5 points) To provide quantitative answers to policy questions a. it is usually sufficient to use common sense. b. you should interview the policy makers involved. c. you should examine empirical evidence. d. it is usually impossible since policy questions are not quantifiable. Answer : c 2. (10 points) What is the distinction between an “error term” and a “residual”? Also explain the difference between i u and ( ) i u E . Answer : The error term is i u which is i Y minus i x 1 β β + in the population model. The residual is the corresponding expression using the sample regression function. That is, it is i i i x Y u 1 ˆ ˆ ˆ β β − − = . i u is the true error for the i th observation, and ( ) i u E is the corresponding population expectation. 2 EXAM #1, ECON 120B, Winter 2005 2 3. (30 points) Let kids denote the number of children that a woman has, and let...
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Winter 2005 - Jeon's Class - Exam 1 - Economics 120B Name...

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