Sample-quiz - the quiz and answers used in this class PDF

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the quiz and answers used in this class...

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Applied Statistics/Econometrics Sample Midterm Department of Economics and Finance Tongji University October 18th, 2016 Instructions.

You are free to use a dictionary during the exam. This exam contains 40 multiple choice

questions. Each one worths 2.5 marks (total 100 marks). There is only one correct answer for each question.

Multiple Choice 1. Economic theory provides a basis for which variables are relevant and should be included in an econometric model. But econometrics provides tools to estimate ____________________ which tells us ________________________________. a.) a model, the functional form that should be used. b.) causality, why it happens that way c.) a parameter, how much or to what degree things change. d.) variables, the probability of a speci…c outcome. ans: c 2. Which of the following variables is most likely to be quantitative? a.) gender b.) education c.) income d.) employment ans: c 3. Which of the following statements about the standard normal distribution is NOT true? a.)

 = 0,  2 = 1

b.) it can be used to …nd probability intervals for any normal distribution c.) it is symmetric d.) it is derived from repeated sampling of naturally occurring phenomena ans: d 4. If ( a.) b.) c.) c.)

P (X = xjY

=

y ) = P (X = x), then

Y is the dependent variable X and Y are positively correlated X and Y are statistically independent Y must be a discrete random variable

ans: c 5. The expected value of a random variable is a.) the probability weighted mean b.) a measure of central tendency of the pdf c.) average value that occurs in many repeated trial of an experiment d.) all of the above ans: d

6. If

is a random variable generated by adding together

Z

what do we know about

( )

var Z

if

X

and

X

and

Y

which are also random variables,

are positively correlated.?

Y

a.)var (Z )

= var(X ) + var(Y ) ( ) < var(X ) + var(Y ) c.) var (Z ) > var (X ) + var (Y ) d.)var (Z ) = var (X )  var (Y )

b.)

var Z

ans: c 7. The expected value of a random variable is a.) the probability weighted mean b.) a measure of central tendency of the pdf c.) average value that occurs in many repeated trial of an experiment d.) all of the above ans: d

8. Which of the following is NOT equal to a.)

(

cov X; Y

)?

 xy

[(x  x )(y  y )] ( )  x y

b.)

E

c.)

E xy

d.)

xy

ans: d

9. In an economic model that uses income to predict monthly expenditures on entertainment, what is the dependent variable? a.) income b.) monthly expenditures on entertainment c.) income elasticity d.) demand for entertainment ans: b 10. Which of the following is NOT an assumption of the Simple Linear Regression Model? a.) The value of y, for each value of x, is

y = 1 + 2x + e b.)The variance of the random error e is 2 var (e) = 

c.) The covariance between any pair of random errors d.) The parameter estimate of ans: d

1

ei

and

ej

is zero

is unbiased.

11. How do you interpret the estimated value of b1 in the following equation:

(

ln E N T _E X P

where

) = b1 + b2 (I N C OM E ) + e

I N C OM E

is annual household income (in thousands) and

E N T _E X P

is annual entertainment

expenses? a.) the income elasticity of entertainment b.) when multiplied by additional

$1000

100

it is the percentage increase in entertainment expenses associated with an

in income

c.) the increase in entertain expenses associated with a

1%

increase in income

d.) the average of the logarithm of entertainment expenses for a household with zero income ans: d...