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9. How does omitting a relevant variable from a regression model affect the estimated coefficient of other variables in the model?a.) they are biased downward and have smaller standard errors
b.) they are biased upward and have larger standard errorsc.) they are biased and the bias can be negative or positived.) they are unbiased but have larger standard errorsAns: c.Level: ModerateSection: 6.310. How does including an irrelevant variable in a regression model affect the estimated coefficient of other variables in the model?11. Which of the following measures is NOT used to evaluate model specification?12. When are R2and adjusted R2equal?13. You estimate 4 different specifications of an econometric model by adding a variable each time and get the following resultsR2adj R2AICModel A0.34580.328522.56Model B0.36890.339422.37Model C0.42560.391621.21Model D0.42990.391121.79Which model appears to be correctly specified?a.)Ab.)Bc.)Cd.)D
Ans: CLevel: ModerateSection: 6.314. If you reject the null hypothesis when performing a RESET test, what should you conclude?15. When collinear variables are included in an econometric model coefficient estimates are