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Econometrics Final Test2

The document contains a mid-semester test for an econometrics course. It includes true/false questions, multiple choice questions, and short essay questions testing concepts like data types, econometric modeling, and assumptions of classical linear models.

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Alinaitwe Godfrey
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41 views

Econometrics Final Test2

The document contains a mid-semester test for an econometrics course. It includes true/false questions, multiple choice questions, and short essay questions testing concepts like data types, econometric modeling, and assumptions of classical linear models.

Uploaded by

Alinaitwe Godfrey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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MID-SEMESTER II TEST II

ARD 3202 INTRODUCTION TO ECONOMETRICS

DURATION: 1 hour
Instructions
 Answer all questions from 1-12
 Choose any one question (either question 13 or question 14 but not both)
 Be neat and orderly in presentation of your working

TRUE/FALSE QUESTIONS 1-4

1) A cross-sectional data set consists of observations on a variable or several variables over


time.
2) A panel data set consists of data on the same cross-sectional units over a given period of
time while a pooled data set consists of data on different cross-sectional units over a
given period of time
3) A time series data is also called a longitudinal data set.
4) An economic model consists of mathematical equations that describe various
relationships between economic variables

SELECT ONE CORRECT ALTERNATIVE IN QUESTIONS 5-12

5) A data set that consists of a sample of individuals, households, firms, cities, states,
countries, or a variety of other units, taken at a given point in time, is called a(n) _____.
A. cross-sectional data set
B. longitudinal data set
C. time series data set
D. experimental data set
6) Econometrics is the branch of economics that _____.
A. develops and uses statistical methods for estimating economic relationships
B. studies the behavior of individual economic agents in making economic decisions
C. deals with the performance, structure, behavior, and decision-making of an
economy as a whole
D. applies mathematical methods to represent economic theories and solve economic
problems

7) Which of the following is the first step in empirical economic analysis?


A. Collection of data
B. Statement of hypotheses
C. Specification of an econometric model

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D. Testing of hypotheses

8) The parameters of an econometric model _____.


A. include all unobserved factors affecting the variable being studied
B. describe the strength of the relationship between the variable under study and the
factors affecting it
C. refer to the explanatory variables included in the model
D. refer to the predictions that can be made using the model

9) Which of the following terms measures the association between two variables?
A. Casual effect
B. Independence
C. Average
D. Correlation
10) The constants of econometric models are referred to as
A. Parameters
B. Statistics
C. Error terms
D. hypotheses
11) The term ‘u' in an econometric model is usually referred to as the _____.
A. Error term
B. Parameter
C. Hypothesis
D. Dependent variable

12) Which of the following is an example of time series data?


A. Data on the unemployment rates in different parts of a country during a year.
B. Data on the consumption of wheat by 200 households during a year.
C. Data on the gross domestic product of a country over a period of 10 years.
D. Data on the number of vacancies in various departments of an organization on a
particular month.

SHORT ESSAY QUESTIONS-CHOOSE ONLY ONE QUESTION

QUESTION 13

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a) Baguma sought to investigate determinants of performance among students at Gulu
University Hoima Campus. He estimated the following regression model.
Pi=β 1 + β 1 T i+ β2 A i +ε i
β 0=0.6 , β 1=0.1 , β 2=−0.2 , SE(β 0 )=1.1 , SE(β 1)=0.01 ¿, R square = 0.76
Where: T is time spent reading, A is class attendance and P is performance.SE denotes
standard error.
Use the above results to answer the following:
i. State both null and alternative hypotheses for the above model (6Mks)
ii. What does ε i represent (2mks)
iii. Interpret R square (4mks)
iv. Interpret the coefficients (8Mks)

QUESTION 14

a) Why does the classical linear model assume that there is no multicollinearity among the
explanatory variables? (4mks)
b) Briefly explain three reasons for heteroscedasticity (3mks)
c) Using graphs, illustrate the difference between positive and negative autocorrelation
(4mks)
d) Explain the difference between a stochastic and a deterministic relationship (4mks)
e) Explain the difference between linear in the variables and linear in the parameters (2mks)
f) Give reasons why we introduce a stochastic disturbance term in a regression equation
(3mks)

END

HAPPY EASTER SEASON

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