Ecs3706 Exam Pack 2024

List any three uses of econometrics? {Ans: 1) Describing economic reality (structural analysis) 2)Testing hypothesis about economic theory (policy evaluation) 3)Forecasting economic activity}What is regression analysis? {Ans: Regression analysis is used to make quantitative estimates of economic relationship that previously have been completely theoretical in nature.}What is specification bias? {Ans: Specification bias occurs when an independent variable is omitted which is relevant in the equation.}What is the goal of econometrics and what inputs/disciplines does it use? {Ans: The goal of econometrics is the estimation of economic relationships. The inputs/disciplines: 1) Economic theory 2) Economic data 3) Statistics}If R2 = 1 {Ans: then all the points lie exactly on the regression line.}The variance of a discrete random variable {Ans: σ²=∑(xi-µx)²×P(xi) The variance of a discrete random variable X is the weighted average for all possible values of X}Explain the estimated regression equation? {Ans: Usually population size may be too large or unknown therefore inference is made on the sample drawn from the population using the estimated regression equation which is the statistical technique that attempts to explain movements in one dependent variable given independent variables.}What is the specification of a model? {Ans: The