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a.) biased downward and have smaller standard errorsb.) biased upward and have larger standard errorsc.) biased and the bias can be negative or positived.) unbiased but have larger standard errorsAns: dLevel: ModerateSection: 6.416. When a set of variables with exact collinearity is included in an econometric model coefficient estimates are17. If your regression results show a high R2, adj R2, and a significant F-test, but low t values for the coefficients, what is the most likely cause?18. Running auxillary regressions where each explanatory variable is estimated as a function of eth remaining explanatory variables can help detect
19. Why is the variance of the forecast y larger than the variance of the expected value of y?a.) the estimated forecast variance includes an estimate of ̂2b.) the estimated forecast variance includes weighted covariance terms of all paired variablesc.) the Gauss-Markov theorem does not apply to forecast of a single observationd.) the expected value of confidence intervals rely on the standard normal distribution while forecast use a t distribution.Ans: aLevel: DifficultSection: 6.5Short Answer1. For what does RESET test?2. When two or more variables move together in systematic ways they are said to be ________________?