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P.1 Brief Answers for ECON0701 Midterm II (2009) 1 a) 95% C.I. Since 96 . 1 025 . 0 ), ( 025 . 0 ), 146 ( 025 . 0 ), 1 3 150 ( t t t , ) ( 2 025 . 0 ), 1 3 150 ( 2 se t = (-0.37444,-0.02556) b) Zero conditional mean (No omitted variable bias) Homoskedasticity :   2 | var x c 0 : 3 2 0 H , 0 1 : H H is not true ) 1 /( / k n SSR J SSR SSR F U U R = 60.60188 > 00 . 3 05 , 0 ), , 2 ( 05 , 0 ), 146 , 2 ( F F Reject 0 H at 5% significance level

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P.2 c) 0 : 2 0 H , 0 : 2 1 H 33333 . 10 ) ( 0 2 2 se t 96 . 1 025 . 0 ), ( 025 . 0 ), 1 2 150 ( t t Reject 0 H at 5% significance level d) 0 : 2 0 H , 0 : 2 1 H Unrestricted model: 2 2 1 0 age age y Restricted model: age y 1 0 ) 1 /( / k n SSR J SSR SSR F U U R = 106.68 > 84 . 3 05 . 0 ), , 1 ( 05 . 0 ), 147 , 1 ( F F Reject 0 H at 5% significance level
P.3 2a) MALE is intercept dummy variable. x MALE and z MALE are slope dummy variables. b) 0 : 0 H ) 1 5 93 /( 3 / ) ( ) 1 /( / ) ( U U R U U R SSR SSR SSR k n SSR J SSR SSR F Please also describe also how you get U SSR and R SSR c) Use Chow test: z x y 3 1 0 Regress y on constant, x and z for female observations only( first 61 observations)

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