Test On Econometrics Topics
Test On Econometrics Topics
Section 1: Introduction
1. Define Econometrics and briefly explain its scope and main divisions. Provide
examples to illustrate your points. (10 marks)
2. Outline and describe the main steps in the methodology of econometric research. Why
is each step critical in conducting an econometric study? (10 marks)
1. Explain the concept of regression analysis. What is the role of the dependent and
independent variables in a regression model? Illustrate with an example. (10 marks)
2. Describe the method of Ordinary Least Squares (OLS) for estimating a regression
model. Include a discussion of the assumptions underlying OLS. (10 marks)
3. List and explain the desirable properties of OLS estimators. Why are these properties
important in econometric analysis? (10 marks)
4. Consider the simple linear regression model: , where is the dependent variable, is the
independent variable, is the intercept, is the slope coefficient, and is the error term.
Explain how the parameters and are estimated using OLS. (10 marks)
Econometrics I Test
Instructions: Answer all questions. Show all necessary computations and explanations
clearly.
Question 1: Ordinary Least Squares (OLS)
Where:
(a) Test the null hypothesis against the alternative at the 5% significance level.
(b) Explain what it means to reject the null hypothesis in this context.
(c) Discuss the role of the t-statistic in hypothesis testing.
Question 3: Multicollinearity
(a) Explain the concept of stationarity and why it is important in time series econometrics.
(b) Describe how you would test whether the series is stationary.
(c) Discuss the consequences of estimating a regression model with non-stationary variables.
End of Test