120 F2 - Final Practice Problems Econometrics 120A 1 The...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Final Practice Problems - Econometrics 120A 1. The following is a fictional joint probability distribution for GDP growth in the US and China. US GDP growth is entered in the left most column, and Chinese GDP growth in the top most row. US/China -2% 3% 10% -1% 0.1 0 0 2% 0.2 0.2 0.2 5% 0 0.1 0.2 (a) What is the probability that Chinese GDP growth is 3%? What is the probability that Chinese GDP growth is 10%? (b) Conditional on Chinese GDP growth being 10%, what is the probability that US GDP growth is 5%? (c) Are the US and Chinese GDP growth independent? (d) Notice that P (US GDP growth = 5%) = 0.3. Looking at your answer to b), an economist argues that high Chinese GDP growth causes US GDP growth to be high. Are the numbers in this table enough to support his conclusion? 2. Suppose the US unemployment rate follows a normal distribution with mean 4% and standard devi- ation 5%. (a) What is the probability of observing an unemployment rate larger than 7%? (b) What is the probability that the unemployment rate is between 1% of its mean? (i.e. between 3% and 5%?)
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern