Exam1_73_SOL.pdf - ECONOMETRICS Universidad Carlos III...

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ECONOMETRICS Universidad Carlos III Midterm 1 March 2016 Name: Group: Instructor Name Instructions: 1. You have 90 minutes time to answer all questions. 2. The total is 30 points 3. You can only have a pen and the ID on your table. 4. Students who have other material on their desk (or in their vicinity), who talk, or who show any other signs of foul play will without further discussion be rewarded with a 0 and will be asked to immediately leave the room. 5. All your answers should be written below the questions. We will NOT read any of the scratch paper. 1
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MULTIPLE CHOICE. (10 POINTS) Choose the one alternative that best completes the statement or answers the question. A correct answer is worth 1 point. A wrong answer is worth - 0.5 points. 1) ^ The OLS residuals, u i , are defined as follows: 1) A) ^ Y i - Y i B) Y i - Ά 0 - Ά 1 X i C) ^ ^ ^ Y i - Ά 0 - Ά 1 X i D) ( Y i - Y ) 2 2) The correlation between X and Y 2) A) can be calculated by dividing the covariance between X and Y by the product of the two standard deviations. B) is the covariance squared. C) is given by corr ( X , Y ) = cov( X , Y ) var( X ) var( Y ) . D) cannot be negative since variances are always positive. 3) Ideal randomized controlled experiments in economics are 3) A) often used by the Federal Reserve to study the effects of monetary policy. B) sometimes used by universities to determine who graduates in four years rather than five. C) often performed in practice. D) useful because they give a definition of a causal effect. 4) An estimator is 4) A) an estimate. B) a nonrandom number. C) a random variable. D) a formula that gives an efficient guess of the true population value. 5) ^ An estimator μ Y of the population value μ Y is consistent if 5) A) Y is normally distributed. B) Y p 0. C) ^ μ Y p μ Y . D) its mean square error is the smallest possible. 6) Heteroskedasticity means that 6) A) the variance of the error term is not constant.
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