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Econometrics Mid

This document contains a midterm exam for an econometrics course. The exam has two parts - multiple choice questions and worked problems. The multiple choice section covers basic econometrics concepts like dependent and independent variables, the error term, and R-squared. The worked problems section asks students to estimate regression coefficients from data, interpret the results, and make a prediction.

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787 views3 pages

Econometrics Mid

This document contains a midterm exam for an econometrics course. The exam has two parts - multiple choice questions and worked problems. The multiple choice section covers basic econometrics concepts like dependent and independent variables, the error term, and R-squared. The worked problems section asks students to estimate regression coefficients from data, interpret the results, and make a prediction.

Uploaded by

alexanderzewdu7
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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AAMBC Dire Dawa Campus

Econometrics Mid Exam for Accounting and Finance 4th year (Extension)
Time Allowed 2:00 hr
Total Mark (30pts) January 2024
Part I Multiple choice (10 pts )
1. A dependent variable is also known as a/an _____.
A. explanatory variable C. predictor variable
B. control variable D. response variable
2. If a change in variable x causes a change in variable y, variable x is called the _____.
A. dependent variable C. explanatory variable
B. explained variable D. response variable
3. The error term in a regression equation is said to exhibit homoskedasticty if _____.
A. it has zero conditional mean
B. it has the same variance for all values of the explanatory variable
. C. it has the same value for all values of the explanatory variable
D. if the error term has a value of one given any value of the explanatory variable.
4.Which one is wrong about Cofficient of determination(R¿ ¿2)¿?
A. R2 always increases as the regressor increases in the model
B. If R2 is high, the model is said to fit the data well
C. If R2 is low, the model is said to fit the data well
D. R2 always decreases as the regressor increases in the model
5. R2 can be computed as

A.1−
∑ 2
ei
B. 1−
( 1−R 2 ) (n−1)
C.
∑ 2
ei
D.
( 1−R2 ) (n−1)
∑ y 2i n−k ∑ y 2i n−k
6.Which one of the following statements is correct about a model with two explanatory
variables Y i=β o + β 1 X 1 i+ β2 X 2 i +U i ?
A. β o is the mean on Y i of all the variables included from the model
B β 1 measures the change in mean value of Y i per unit change in X 1 keeping X 2 constant
C. β 2 measures the change in mean value of Y i per unit change in X 2 keeping X 2 constant
D. β 1 measures the change in mean value of Y i per unit change in X 1 keeping X 1 constant
E. β 2 measures the change in mean value of Y i per unit change in X 1 keeping X 2 constant

1
7.Multiple linear regression has
A. one independent variable and one dependent variable
B. one dependent variable and two or more independent variables
C. two or more dependent variables and one independent variable
D. A & B
8.Simple linear regression has
A. one independent variable and one dependent variable
B. one dependent variable and two or more independent variables
C. two or more dependent variables and one independent variable
D. A & C
9. Econometrics converts quantitative statements into qualitative statements
A. True B. False
10. which of the following statements is wrong ?
A. Cross sectional data are collected from different parties at a given point in time
B. Time series data are collected at regular intervals
C. Panel data are combination of time series and cross sectional data
D. None
Part II Work out (20 pts )
11.From the data given in earnings and education , we obtained the following regression
^
Mean wagei=0.7437 +0.6416 Educationi
se=( 0.8355 ) ()
t=()(9.6536)
n = 13 R2 = 0.8944
a. Fill in the missing numbers (5pts)
b. Write the value of ^β o∧ β^ 1(interpret the results) (5pts)

2
Consider a SLRM Y i= ^β o + ^β 1 X i+U ithat relates consumption (Y) and Income of the households
(X)
∑ x i y i=21
∑ x 2i =28
∑ yi2=30.4
∑ ^yi2=15.75
X =8
Y = 9.6
∑ e2i =14.65
N=10

1.Compute ^β 1 (Interpret the result) (3pts)

2. Compute ^β o (Interpret the result) (3pts)

3. Compute R2 (Interpret the result) (3pts)

4. What is your prediction of Y when X is 20 ( 1pt)

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