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Unformatted text preview: Applied Econometrics Midterm 14 th of March, 2005 This exam consists of five short questions ( worth two points apiece ) and five long questions ( worth fourteen points each ) , for a total of 80 points. You have 80 minutes to answer all completely and clearly in the space provided. Short Questions: Define the following terms. If I gave multiple definitions for a single term, any of these definitions is acceptable. 1. Heteroskedasticity 2. Natural experiment 3. Instrumental Variable 4. Endogeneity 5. Consistency Question 1: Suppose that the model is y i = ! 1 + ! 2 " x i + e i ( the standard linear model with a single regressor ) . a. Derive the OLS estimator of ! 2 . b. Show that the OLS estimator is unbiased. State the assumptions necessary for this result ( and no others ) . Question 1: Suppose that the model is y i = ! 1 + ! 2 " x i + e i ( the standard linear model with a single regressor ) ....
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- Fall '08