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Unformatted text preview: Midterm 2  Form B  Spring 2010 Economics 203 Instructors: Petry and Sahakyan Name: 1. B. A positive residual is more likely to follow a positive residual when positive autocorrelation is present. Similarly, a negative residual is more likely to follow a negative residual when positive autocorrelation is present. In contrast, negative autocorrelation is characterized by adjacent residuals being likely to be of opposite signs. 2. D. R 2 of 0 means your SSR is 0 (with SST =50,000). That means your Fstatistic is 0, since it has SSR on top and something positive on bottom. 3. D. According to the ANOVA table, the residual degrees of freedom is 280, i.e., n k 1 = 280. Since there are 5 independent variables in the model, k = 5 and n = 286. 4. D. MSR = SSR/k = 79 . 41079527, SSE = SST SSR , and MSE = SSE/ ( n k 1) = 9 . 615866168. Then F = MSR/MSE = 8 . 2583. 5. A. The t statistic for the coefficient of ‘kids’ is t = b 4 /s b 4 = . 20812. 6. E. The t statistic for the coefficient of ‘kids’ is 0.2081. Looking at the confidence interval of b 4 , we can see that the null hypothesis of excluding this variable cannot be rejected since the 95% interval contains 0. You could also compare the test statistic to other test statistics. Since .20811 is closer to zero than the test statistic of .9395 on education, the pvalue on kids has to be greater than .348284 which is obviously larger than .05, so that variable is not significantly related to extramarital affairs and should not be included. 7. XXX Residual is found by taking y ˆ y . ˆ y for this individual is 3.849+.073*12.76*0+2.8101*.0395*7.1*1 .474*5 = 3.03199. Thus 43.03199=0.9680 8. E. The estimated coefficient of .76 is centered at the confidence interval. Then you need s b 2 = b 2 /t b 2 = 0 . 1786. Then .76+1.650*.1786 = .46531. 9. D. Pvalues on the individual ttests increase under serious multicollinearity, not decrease. This is due to inflated standard errors of the slope coefficients....
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This note was uploaded on 02/14/2011 for the course ECON 203 taught by Professor Petry during the Spring '09 term at University of Illinois, Urbana Champaign.
 Spring '09
 PETRY
 Economics

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