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# ProblemSet6 Answers - Professor Mumford [email protected]

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Professor Mumford Econ 360 - Fall 2010 [email protected] Problem Set 6 Answers Multiple Choice Questions (16 points) 1. (4 points) What is the t -statistic for the ACT coefficient, assuming a null hypothesis that ACT has no effect on GPA . (a) 0.2 (b) 0.5 (c) 2 (d) 5 2. (4 points) What is the interpretation of the P -value for the study coefficient. 3. (4 points) What is the Total Sum of Squares (SST) for the model. Note that the sum of the squared residuals (SSR) is given above. 4. (4 points) Which of the variables is more important in explaining GPA , study or ACT ? Why? 1

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True/False (12 points) Please write the entire word. No explanations are required. 5. FALSE Consider the estimated model ˆ y = ˆ β 0 + ˆ β 1 x + ˆ β 2 x 2 . The estimated change in y caused by a change in x is given by: Δˆ y parenleftBig ˆ β 1 + 2 ˆ β 2 x parenrightBig Δ x . 6. TRUE R -squared can never fall when a new independent variable is added to a regression equation.
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ProblemSet6 Answers - Professor Mumford [email protected]

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