01:220:322:07 Econometrics Fall 2010
Midterm2 November 4.
Instructor: Yoichi Otsubo
Student ID
Name
Instructions.
Starting at 4:30 pm °nishing at 5:50 pm. You can use a SIMPLE calculator but cell phone
is NOT allowed. There are 20 questions, 5 points each. In total, worth 100 points of the course grade.
A.
Multiple Choice.
Circle the right answer.
1)
E
(
u
i
j
X
i
) = 0
says that
a. dividing the error by the explanatory variable results in a zero (on average).
b. large outliers are unlikely.
c. the sample mean of the
X
s is much larger than the sample mean of the errors.
*d. the conditional distribution of the error given the explanatory variable has a zero mean.
2) The error term is homoskedastic if
*a.
var
(
u
i
j
X
i
=
x
)
is constant for
i
= 1
; :::; n
b.
var
(
u
i
j
X
i
=
x
)
depends on
x
c.
X
i
is normally distributed
d. there are no outliers
3) In the presence of heteroskedasticity, and assuming that the usual least squares assumptions hold,
the OLS estimator is
a. e¢ cient
b. BLUE
*c. unbiased and consistent
d. unbiased but not consistent
4) In the multiple regression model, the adjusted
R
2
;
*b. will never be greater than the
R
2
.
1
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
5) Consider the following multiple regression models (a) to (d) below.
DFemme
= 1
if the individual
is a female, and is zero otherwise;
DMale
is a binary variable which takes on the value one if
the individual is male, and is zero otherwise;
DMarried
is a binary variable which is unity for
married individuals and is zero otherwise, and
DSingle
is
(1
°
DMarried
)
.
Regressing weekly
earnings
(
Earn
)
on a set of explanatory variables, you will experience perfect multicollinearity in
the following cases unless:
*c.
d
Earn
i
=
b
°
0
+
b
°
1
DFemme
+
b
°
3
X
3
i
:
This is the end of the preview.
Sign up
to
access the rest of the document.
 Fall '10
 Otusbo
 Econometrics, Regression Analysis, per capita, OppN etW, DF SaSu

Click to edit the document details