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Unformatted text preview: 1 ECON 725 SAMPLE EXAM 1 S.C. AHN 2010 SPRING Q1. (40 pts.; 5 pts. on each.) Consider the following statements independently. State clearly whether you agree (A) or do not agree (DNA). If you do not agree, explain why not (23 linelong answers would be enough). No credit may be given unless an appropriate explanation is given. 1) The theorem of the variance decomposition holds even if the conditional mean of y is not linear in x . 2) Zero correlation between two random variables never means that the variables are stochastically independent. 3) If the two random variables Y and X are jointly normally distributed, Pr (  ) (  ) oj y x E y x . 4) Under the hypothesis that o R r , the restricted OLS estimator is more efficient that the unrestricted OLS estimator ˆ . Thus, the R 2 computed with must be greater than the R 2 computed with ˆ . (Use 2 1 ( / ) R SSE SST .) 5) If regressors are stochastic, we are not able to show that the OLS estimator...
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This note was uploaded on 11/19/2010 for the course ECON 270a taught by Professor Ahn during the Spring '10 term at ASU.
 Spring '10
 Ahn
 Econometrics

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