Practice Exam 3 - Fall 2008

Practice Exam 3 - Fall 2008 - Econ 371 Practice Exam #3...

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Econ 371 Practice Exam #3 Multiple Choice (5 points each): For each of the following, select the single most appropriate option to complete the statement. 1 ln( ) ln YX 1) The interpretation of the slope coefficient in the model ( ) i u 01 ii = β ++ is as follows: a) a 1% change in X is associated with a 1 % change in Y. b) a change in X by one unit is associated with a 1 change in Y. c) a change in X by one unit is associated with a 100 1 % change in Y. d) a 1% change in X is associated with a change in Y of 0.01 1 . 2) To test whether or not the population regression function is linear rather than a polynomial of order r, a) check whether the regression 2 R for the polynomial regression is higher than that of the linear regression. b) compare the TSS from both regressions. c) look at the pattern of the coefficients: if they change from positive to negative to positive, etc., then the polynomial regression should be used. d) use the test of (r-1) restrictions using the F-statistic. 3) Simultaneous causality bias a) is also called sample selection bias. b) happens in complicated systems of equations called block recursive systems. c) results in biased estimators if there is heteroskedasticity in the error term. d) arises in a regression of Y on X when, in addition to the causal link of interest from X to Y, there is a causal link from Y to X. 4) A survey of earnings contains an unusually high fraction of individuals who state their weekly earnings in 100s, such as 300, 400, 500, etc. This is an example of a) errors-in-variables bias.
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This note was uploaded on 08/09/2009 for the course ECON 120B taught by Professor Jeon during the Spring '08 term at UCSD.

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Practice Exam 3 - Fall 2008 - Econ 371 Practice Exam #3...

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