Review for midterm

Review for midterm - The University of Illinois at Chicago...

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The University of Illinois at Chicago Economics 346: Econometrics Helen Roberts Review Questions for the Midterm and Study Plan e-mail: [email protected] Phone: (312) 355-0378 (I check messages from home). These questions are worth 5 points each. Answers in italics. For 5-point questions, I look for 2-3 sentences, generally. One to state your answer, and one to explain why. I give partial credit, so the worst thing you can do is to leave the question blank. 5 points means you gave a great answer, 3-4 means you were basically right but left something out, 1-2 means you wrote something that is correct, but didn’t get the answer. So write something relevant, even if you aren’t sure you know the answer. Sometimes, this helps you figure out the answer. 1. What should the slope of a regression line through the residuals be? The slope should be zero – the regression residuals are supposed (by assumption) to be uncorrelated with each X variable. The residual plots have an X variable on the horizontal axis and the residuals on the Y axis, so a positive or negative slope would indicate that they are correlated with that X variable, breaking one of the classical assumptions. 2. True or false and explain: The correlation between 2 variables is the same as a regression between 2 variables. False (and the T/F part is worth 1 point – 4 points come from the explanations) . When false, you need only give one difference between correlation and regression. Here are a few (but not all the possibilities): 1)Correlation is symmetric, regression is not, the correlation of X with Y is the same as the correlation of Y with X. Regression gives a different answer if you switch the dependent
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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 for midterm - The University of Illinois at Chicago...

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