Econometrics Final Exam Questions (80 Terms) With Verified Definitions Updated 2024

If an independent variable in a multiple linear regression model is an exact linear combination of other independent variables, the model suffers from the problem of _____. a. perfect collinearity b. homoskedasticity c. heteroskedasticty d. omitted variable bias {Ans: a. perfect collinearity}The variance of the slope estimator increases as the error variance decreases. (True/False) {Ans: False}A dependent variable is also known as a(n) _____. a. explanatory variable b. control variable c. predictor variable d. response variable {Ans: d. response variable}Nonexperimental data is called _____. a. cross-sectional data b. time series data c. observational data d. panel data {Ans: b. time series data}Which of the following statements is true? a. If the calculated value of F statistic is higher than the critical value, we reject the alternative hypothesis in favor of the null hypothesis. b. The F statistic is always nonnegative as SSRr is never smaller than SSRur. c. Degrees of freedom of a restricted model is always less than the degrees of freedom of an unrestricted model. d. The F statistic is more flexible than the t statistic to test a hypothesis with a single restriction. {Ans: b. The F statistic is always nonnegative as