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econ466mt2

# econ466mt2 - Economics 466 Introductory Econometrics State...

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Economics 466: Introductory Econometrics State University of New York at Binghamton Department of Economics Fall 2011 Midterm II The exam consists of three questions on three pages. Each question is of equal value. 1. Consider the F -statistic discussed in class (the subscript u refers to the unrestricted model and the subscript r refers to the restricted model) F = ¡ R 2 u R 2 r ¢ /q (1 R 2 u ) / ( n k 1) (a) De fi ne each component on the right hand side of the equation. (b) Using this F -statistic (the one in terms of R-squared, R 2 ), derive the F -statistic in terms of the residual sum of squares ( SSR ) formulation. Show your work. (c) De fi ne SSR . Does SSR need a subscript for r or u ? If so, why? If not, why not? (d) De fi ne SST . Does SST need a subscript for r or u ? If so, why? If not, why not? 1

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2. Consider the regression model y i = α + βx i + γx 2 i + u i , i = 1 , 2 , . . . n . Where we assume that α > 0, β > 0 and γ < 0. In the scatter plot below, please note the following: (a) Label the axes and draw and label the estimated regression curve.
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econ466mt2 - Economics 466 Introductory Econometrics State...

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