MCQs Econometrics-2

Posted by Muhammad Imdad Ullah Posted on September 19, 2021 0 Comments on MCQs Econometrics-2
Posted in Advanced Statistics, Statistics

This quiz is about Econometrics, which covers the topics of Regression analysis, correlation, dummy variable, multicollinearity, heteroscedasticity, autocorrelation, and many other topics. Let’s start with MCQs Econometrics test

MCQs about Multicollinearity, Dummy Variable, Selection of Variables, Error in Variables, Autocorrelation, Time Series, Heteroscedasticity, Simultaneous Equations, and Regression analysis

1. The conditional variance of $Y_i (Var(u_i))$ conditional upon the given $X_i$ does not remain the same regardless of the values taken by the variable $X$ when the problem of ________ exists.

 
 
 
 

2. Which of the following is a consequence in case of imperfect multicollinearity?

 
 
 
 

3. Which of the following test is used to compare OLS estimates and WLS estimates?

 
 
 
 

4. Which of the following is an indication of the existence of multicollinearity in a model?

 
 
 
 

5. In GLS the weights assigned to each observation are _______ to its $\sigma_i$

 
 
 
 

6. The regression predictions are inefficient

 
 
 
 

7. In case of homoscedasticity

 
 
 
 

8. Heteroscedasticity may _____________ the variance and standard errors of the OLS estimates.

 
 
 
 

9. For Durbin-Watson test:

 
 
 
 

10. In correct data transformation (ratio or difference, linear, log-linear) is also source of

 
 
 
 

11. Multicollinearity causes

 
 
 
 

12. The generalized least square (GLS) is an efficient procedure that weights each squared residual by:

 
 
 
 

13. In the presence of autocorrelation, the OLS estimates are no longer

 
 
 
 

14. Does White General Heteroscedasticity test follow $\chi^2$ distribution with degrees of freedom?

 
 
 
 

15. Which one of the following is NOT an example of misspecification of functional form?

 
 
 
 

An application of different statistical methods applied to the economic data used to find empirical relationships between economic data is called Econometrics.

Econometrics means “Economic Measurement”. Econometrics is the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of statistical inference.

Econometrics can also be defined as the empirical determination of economic laws. Econometrics can be classified as (i) Theoretical Econometrics and (ii) Applied Econometrics.

(i) Theoretical Econometrics

Theoretical econometrics is concerned with developing appropriate methods for measuring economic relationships specified by econometric models. Theoretical econometrics leans heavily on mathematical statistics and must spell out the assumptions of methods (such as Least Squares), their properties, and what happens to these properties when one or more of the assumptions of the technique are not fulfilled.

(ii) Applied Econometrics

In applied econometrics, the tools of theoretical econometrics are used to study special fields(s) such as production function, investment function, demand and supply function, portfolio theory, etc.

Types of Econometrics Data

Different type of data is used in Econometrics. There are three important types of data for empirical analysis:

  • Time Series Data
    A time series data is a set of observations on the values that a variable takes at different times. The time series data may be collected at regular time intervals such as daily, weekly, monthly, quarterly, annually, etc.
  • Cross-Sectional Data
    Cross-sectional data are data on one or more variables collected at the same point in time. Cross-sectional data has a problem of heterogeneity.
  • Pooled Data
    Pooled data is a combination of both time series and cross-sectional data.

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Author: Muhammad Imdad Ullah