Testmidterm2005

Testmidterm2005 - Economics 513, Test Midterm Problem 1 To...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Economics 513, Test Midterm Problem 1 To study the relation between a dependent variable y and K - 1 independent variables x 2 , . . . , x K - 1 we specify a multiple linear regression model. (i) Give the equation for the inexact linear relation between y and x 2 , . . . , x K - 1 . The relation has an intercept. The data, y i , x i 2 , . . . , x iK , i = 1 , . . . , n are a random sample from the population of US households. (ii) Represent the observations in matrix notation, and give the multiple linear regression model in matrix notation. (iii) Give the assumptions for the Classical Linear Regression (CLR) model. (iv) For one of the assumptions in the case considered in this problem is it sufficient to assume that the random error for an observation is mean independent of the vector of independent variables for that observation? Why (not)? (v) Is the assumption of no serial correlation satisfied in this case? Why (not)? Problem 2
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.
Ask a homework question - tutors are online