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Economic Statistics
Economics 321
Prof. Gandhi
Sample Final Exam
Your exam is on Monday, December 13
from 810am
Name___________________
Instructions:
 For part 1, put your answers on the Scantron sheet using a No. 2 pencil. In
addition to the answers, you need to fill in your name (last, first)
and your student
ID#.
Also write the version/color of your exam
in the margin. Do not fold or bend
this sheet.
 For part 2, your answers should be written directly on this exam.
 You are only permitted to use a writing utensil and a standard calculator (as
defined in class) to take this exam.
 Please raise your hand if you have any questions during the exam.
 TURN OFF ALL MOBILE PHONES!
 The exam ends at 10am.
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Multiplechoice questions
(3 points each): Clearly mark the best answer in pencil on your
SCANTRON sheet.
1. Which of the following is the best interpretation of b
2
in this equation:
2
1
ln
25
.
0
4
.
2
01
.
1
ˆ
X
X
Y

+
=
a.
A 1 unit increase in X
2
causes a 0.25 unit decrease in Y, holding X
1
constant.
b.
A 1% increase in X
2
causes a 0.0025 unit decrease in Y, holding X
1
constant.
c.
A 1 unit increase in X
2
causes a 25% decrease in Y, holding X
1
constant.
d.
A 1% increase in X
2
causes a 0.25% decrease in Y, holding X
1
constant.
2. Using the equation below, determine what the likely direction of bias is in the estimate slope
coefficient caused by omitting “years of experience” (
exp)
if it is a relevant variable.
univ
wage
066
.
0
121
.
2
)
(
ˆ
ln
+
=
where
wage
= hourly wage and
univ
= number of years attended at 4year university or college
a.
Negative because
exp
and
wage
are likely negatively correlated and
exp
and
univ
are
likely positively correlated.
b.
Negative because
exp
and
wage
are likely positively correlated and
exp
and
univ
are
likely negatively correlated.
c.
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 Fall '08
 GANDHI
 Economics, Regression Analysis, #, per capita, Scantron, recovery time, Prof. Gandhi

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