Midterm 1 - Department of Economics - UIUC. Econ 471...

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Department of Economics - UIUC. Econ 471 -Midterm Exam, Fall 2007. Professor Luiz Renato Lima Question 1 (40 points) You need to indicate whether the statements below are true or false. You MUST justify your choice. Correct choices will receive no point if the justi&ca- tion used by you is incorrect. (a) In the classical regression model y = 1 + 2 x + e , the slope estimate is the sample covariance between x and y divided by the sample variance of x . sum of squared residuas is as small as possible, hence the term least squares. (c) the larger the variance of x in the linear regression model y = 1 + 2 x t + e , the more precise will be the estimation of the slope coe¢ cient 2 . (d) The R 2 and adjuted R 2 do not tell you whether the regressors are good at predicting the values of the dependent variable in a sample of data in hand. (e) The
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This note was uploaded on 10/15/2008 for the course ECON 471 taught by Professor Oliveira-lima during the Spring '08 term at University of Illinois at Urbana–Champaign.

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Midterm 1 - Department of Economics - UIUC. Econ 471...

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