Econometric model - Study guides, Class notes & Summaries

An important feature of a modern approach is that the explanatory variables—along with the dependent variable—are treated as correct answers outcomes of random variables Econometrics is based upon correct answers the development of statistical methods for estimating economic relationships, testing economic theories, and evaluating and implementing government and business policy. A common application of econometrics is the forecasting of such important macroeconomic variables as intere...

Week 1 (Chapter 1) Introduction to Econometrics Exam Questions and Answers 100% Pass Verified & Updated What is econometrics based upon? -Answer-the development of statistical methods for: 1) Estimating economic relationships 2) Testing economic theories 3) Evaluating and implementing government and business policy What is a common application of econometrics? -Answer-forecasting of important macroeconomic variables as: 1) interest rates 2) inflation rates 3) Gross domestic product (G...

Week 1 (Chapter 1) Introduction to Econometrics Exam Questions and Answers 100% Pass Verified & Updated What is econometrics based upon? -Answer-the development of statistical methods for: 1) Estimating economic relationships 2) Testing economic theories 3) Evaluating and implementing government and business policy What is a common application of econometrics? -Answer-forecasting of important macroeconomic variables as: 1) interest rates 2) inflation rates 3) Gross domestic product (G...

Week 1 (Chapter 1) Introduction to Econometrics Exam Questions and Answers 100% Pass Verified & Updated What is econometrics based upon? -Answer-the development of statistical methods for: 1) Estimating economic relationships 2) Testing economic theories 3) Evaluating and implementing government and business policy What is a common application of econometrics? -Answer-forecasting of important macroeconomic variables as: 1) interest rates 2) inflation rates 3) Gross domestic product (G...

Causal Effect correct answers A ceteris paribus change in one variable that has an effect on another variable Ceteris Paribus correct answers all other relevant factors are held fixed Cross-sectional Data Set correct answers A data set collected by a sampling population at a given point in time Data Frequency correct answers The frequency at which time series data are collected. Yearly, quarterly, and monthly are the most common data frequencies Econometric Model correct answers An e...

Major uses of econometrics correct answers Forecasting: interest rates, stock prices Policy evaluation: effect of a minimum wage Testing economic policy: do consumers behave as our theories predict Estimating (magnitudes of) economic relationships (PED, MPC, returns to education) Why Econometrics? correct answers Observe the world and cannot experiment Means we can rarely hold constant all factors in the economic model What is covariance? correct answers Covariance measures the total v...

Nonexperimental data correct answers data that has not been obtained through controlled experiments on individuals, firms, or segments of the economy observational data correct answers Nonexperimental data; emphasize the fact that the researcher is a passive collector of the data. Experimental data correct answers Data that have been obtained by running a controlled experiment. empirical analysis correct answers A study that uses data in a formal econometric analysis to test a theory, ...

Consider the following regression model: log(y) = β0 + β1x1 + β2x1 x3+ β3x3 + u, with βk≠0 (k=0,1,...,3). This model will suffer from functional form misspecification if _____. correct answers the interaction term x1x3 is omitted from the model Which of the following correctly identifies a difference between cross-sectional data and time series data? correct answers Time series data is based on temporal ordering, whereas cross-sectional data is not. A stochastic process refers to a:...

Write down multivariate linear regression model with 4 explanatory variable using general notations (Yi, β0, β1,β2, β3, β4, X1i, X2i X3i, X4i, and εi) and identify dependent variable, independent variables, constant term, coefficients, and error term. correct answers Constant b0 Independent b Dependent x Error 2 What is the main difference in the interpretation of the coefficients between single-explanatory variable regression model and multivariate regression model? correct answers ...

ECS 4863-ECONOMETRICS ASSIGNMENTS 01 2021-2022. Question 1 1.1 Define Econometrics Econometrics is the analysis of economic phenomena using economic theory, mathematics and statistics. Econometric models are built using mathematical economics to obtain numerical results. 1.2 Explain how econometricians usually analyse a problem - Statement of theory hypothesis: according to Keynes, marginal propensity to consume (MPC), the rate of change of consumption for a unit change in income, is grea...