When collinear variables are included in an econometric model coefficient

When collinear variables are included in an

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15. When collinear variables are included in an econometric model coefficient estimates are 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: d Level: Moderate Section: 6.4 16. When a set of variables with exact collinearity is included in an econometric model coefficient estimates are a Level: Easy Section: 6.4 17. 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? c Level: Easy Section: 6.4
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18. Running auxillary regressions where each explanatory variable is estimated as a function of eth remaining explanatory variables can help detect c Level: Moderate Section: 6.4 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 ̂b.) 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: 2 a Level: Difficult Section: 6.5 Short Answer 1. For what does RESET test? Level: Moderate Section: 6.3 2. When two or more variables move together in systematic ways they are said to be ________________? Level: Easy Section: 6.4
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