# answers2009final - Answer key for the final in 2009 1 a v b...

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Unformatted text preview: Answer key for the final in 2009 1.) a.) v b.) v-vi c.) v-vi d.) vii e.) none f.) none 2.) a.) ˆ β = ∑ T t =1 x t x t- 1 ∑ T t =1 x t y t for x t = (1 ,x t ) . b.) ˆ γ = S xy /S xx c.) T X t =1 e 2 t = T X t =1 [( y t- ¯ y )- ˆ γ ( x t- ¯ x )] 2 = T X t =1 ( y t- ¯ y ) 2 + T X t =1 ˆ γ 2 ( x t- ¯ x ) 2- 2ˆ γ T X t =1 ( x t- ¯ x )( y t- ¯ y ) T- 1 T X t =1 e 2 t = S yy + S 2 xy S 2 xx S xx- 2 S 2 xy S xx = S yy- S 2 xy S xx Therefore, R 2 = 1- S yy- S 2 xy S xx S yy = 1- 1 + S 2 xy S xx S yy = r 2 xy d.) F = ˆ γ 2 TS xx s 2 = TS 2 xy S xx ( S yy- S 2 xy /S xx ) T T- 2 = ( T- 2) S 2 xy S xx S yy- S 2 xy 1 e.) F = ( T- 2) 1- 1 + S xx S yy S 2 xy = ( T- 2) 1- 1 + 1 /R 2 = ( T- 2) R 2 1- R 2 3.) a.) Factors in ε i such as an economic shock might be positively corre- lated with s i . This is expected to result in ˆ β 2 being biased upward because if cov ( s i ,ε i ) > ˆ β 2 = β 2 + ∑ n i =1 ( s i- ¯ s )( ε i- ¯ ε ) ∑ n i =1 ( s i- ¯ s ) 2...
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## This note was uploaded on 03/02/2012 for the course ECON 220b taught by Professor Hamilton,j during the Spring '08 term at UCSD.

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answers2009final - Answer key for the final in 2009 1 a v b...

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