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A-1
ECN 425
EXERCISE 2
DR. AHN
ECONOMETRICS
FALL 2011
Q1.
(30 pts.; 3 pts. on each.)
Choose the one alternative that best completes the statement or
answers the question.
Write your answers below.
The ones marked on questions will not count.
Answers
for 1):
; for 2):
;
for 3):
;
for 4):
;
for 5):
for 6):
; for 7):
;
for 8):
;
for 9):
;
for 10):
1)
An example of a randomized controlled experiment is when
a.
households receive a tax rebate in one year but not the other.
b.
one U.S. state increases minimum wages and an adjacent state does not, and
employment differences are observed.
c.
random variables are controlled for by holding constant other factors.
d.
some 5
th
graders in a specific elementary school are allowed to use computers at
school while others are not, and their end-of-year performance is compared holding
constant other factors.
2)
Most economic data are obtained
a.
through randomized controlled experiments.
b.
by computer simulations based on economic models.
c.
through textbook examples typically involving ten observation points.
d.
by observing real-world behavior.
3)
In the simple linear regression model, the regression slope
a.
indicates by how many percent
Y
increases, given a one percent increase in
X
.
b.
indicates by how many units
Y
increases, given a one unit increase in
X
.
c.
represents the elasticity of
Y
on
X
.
d.
when multiplied with the explanatory variable will give you the predicted
Y
.

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