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Unformatted text preview: BY WRITING YOUR PPID HERE , YOU INDICATE THAT YOU AGREE TO ABIDE BY THE HONOR PLEDGE : ________________________ Applied Econometrics Final Quatro de mayo, 2007 This exam consists of ten short questions ( worth four points apiece ) and five long questions ( worth fifteen points each ) , for a total of 100 points. You have 120 minutes to answer all completely and clearly in the space provided. Short Questions 1. In January 2006, the town of Smithboro instituted a local “ living wage ” that effectively increased the minimum wage from $ 5.15/hour to $ 7.50/hour. From December 2005 to February 2006, the unemployment rate in Smithboro increased from 3.0 % to 4.5 % . ( The change is statistically significant. ) An economic study reports this finding, and says that it confirms the theory that minimum wages cause unemployment. Comment on this interpretation. 2. What condition guarantees the unbiasedness of the OLS estimator?...
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- Spring '08
- Econometrics, Maximum likelihood, Estimation theory, Yi, Panel data