Review final

Review final - The University of Illinois at Chicago...

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The University of Illinois at Chicago Economics 346: Econometrics Review for Final Examination 1. Why are the errors in cross-section studies unlikely to be serially correlated? 2. A somewhat naive researcher attempts to estimate an aggregate consumption function for the U.S. by regressing a consumption variable C on disposable income Y and savings S. The model is C = β 1 + β 2 Y + β 3 S + ε . How good a fit is this researcher likely to get when this equation is run? (Notice that C=Y-S identically for all observations.) 3. Your regression of agricultural production had a high R 2 (.98), an F statistic that was significant at the 1% level, but the coefficient on machinery was negative and insignificant. What is the problem with this model? 4. True or false and explain: The problems from including irrelevant variables in a regression model are more serious than the problems from omitting variables that should be included. 6. True or false and explain: The R
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This note was uploaded on 02/16/2011 for the course BUS 355 taught by Professor White during the Spring '11 term at UChicago.

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Review final - The University of Illinois at Chicago...

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