Question 1

You analyze price elasticity of demand. Choose the best model for this purpose:

Accepted Answer

lnY=α+βlnX

Answer

Y=α+βX

Question 2

You analyze prices of flats dependent on total area of each flat . You will model this relationship with the help of:

Accepted Answer

linear function

Answer

logarithmic function

Answer

Cobb-Douglas production function

Answer

cubic function

Question 3

You analyze gross national product of Jordan (GNP) dependent on money supply (M). You will model this relationship with the help of:

Accepted Answer

linear-to-log model

Answer

log-linear model

Answer

linear model

Question 4

You analyze cost of production dependent on output. You will model this relationship with the help of:

Accepted Answer

cubic model

Answer

binary logarithmic model

Answer

linear model

Answer

log-linear model

Question 5

You analyze growth rate (or rate of increment) of a particular economic variable. Choose the best model for this purpose:

Accepted Answer

semi-log model

Answer

linear model

Answer

polynomial model

Question 6

Interpret binary logarithmic model lnY=lnA+βlnX+ε

Accepted Answer

when X increases by 1 %, then Y increases by β %

Answer

when X increases by 1 unit, then Y increases by β units

Answer

when X increases by 1 %, then Y increases by 0.01∙β units

Answer

when X increases by 1 unit, then Y increases by (100∙β) %

Question 7

Interpret log-linear model lnY=α+βX+ε

Accepted Answer

when X increases by 1 unit, then Y increases by (100∙β) %

Answer

when X increases by 1 %, then Y increases by 0.01∙β units

Answer

when X increases by 1 unit, then Y increases by β units

Answer

when X increases by 1 %, then Y increases by β %.

Question 8

Interpret linear-to-log model Y=α+βlnX+ε

Accepted Answer

when X increases by 1 %, then Y increases by 0.01∙β units

Answer

when X increases by 1 unit, then Y increases by β units

Answer

when X increases by 1 unit, then Y increases by (100∙β) %

Answer

when X increases by 1 %, then Y increases by β %

Question 9

Regression models, which contain both numeric and categorical variables, are called:

Accepted Answer

ANCOVA

Answer

ARMA

Answer

ARIMA

Answer

ANOVA

Question 10

You describe the difference in wages for males and females (“1” is for male). The model is wage(i)=β1+β2 exper(i)+β3educ(i)+β4male(i)+ε(i). Interpret coefficient β4.

Accepted Answer

it shows by how many the wages of males and females differs, with education and experience being equal

Answer

it shows by how many educational level of males and females differs, with wages and experience being equal

Answer

it shows by how many working experience of males and females differs, with education and wages being equal

Question 11

You study the demand for the ice cream dependent on its price and a season of a year. The model is icecream=β1+β2 price+β3 spring+β4 summer+β5 autumn+ε. Winter is a basic season. What is the sub-model for spring?

Accepted Answer

icecream=(β1+β3)+β2 price+ε

Answer

icecream=(β1+β4)+β2 price+ε

Answer

icecream=(β1+β5)+β2 price+ε

Answer

icecream=β1+β2 price+ε

Question 12

You study the demand for the ice cream dependent on its price and a season of a year. The model is icecream=β1+β2 price+β3 spring+β4 summer+β5 autumn+ε. Winter is a basic season. What does coefficient β5 show?

Accepted Answer

the difference in demand for an ice-cream between autumn and winter

Answer

the difference in demand for an ice-cream between summer and winter

Answer

the difference in demand between winter and other three seasons cumulatively

Answer

the difference in demand for an ice-cream between spring and winter

Question 13

Incorrect selection of a functional form of a model or incorrect selection of a set of independent variables (regressors), is called a problem of specification.

Accepted Answer

True

Answer

False

Question 14

When we include insignificant variable into a model:

Accepted Answer

estimators of β-coefficients become inefficient

Answer

estimators of β-coefficients become inconsistent

Answer

estimators of β-coefficients become biased

Answer

we can not test hypothesis and construct confidence intervals

Question 15

When we exclude significant variable from a model:

Accepted Answer

estimators of β-coefficients are linear towards dependent variable (y)

Answer

estimators of β-coefficients become unbiased

Answer

estimators of β-coefficients become consistent

Answer

we can test hypothesis and construct confidence intervals

Question 16

If there is one insignificant variable in a regression model , it can be revealed by:

Accepted Answer

low  t-statistic (close to zero)

Answer

low  F-statistic (close to zero)

Answer

high F-statistic

Answer

high t-statistic

Question 17

If there are several insignificant variables in an initial regression model, then we estimate another regression model (without those variables). Then we compare R2-adjusted for unrestricted (initial) model and R2-adjusted for restricted model (without insignificant variables). What statistical test do we apply in this algorithm?

Accepted Answer

F

Answer

χ2

Answer

t

Answer

DW

Question 18

What is the null hypothesis in F-test?

Accepted Answer

several (or all) regressors are insignificant

Answer

all regressors are significant

Answer

at least one regressor is significant

Question 19

When we use critical value approach, statistical inference in F-test is the following:

Accepted Answer

if F_statistic more than F_critical, then null hypothesis is rejected

Answer

if F_statistic less than F_critical, then null hypothesis is rejected

Answer

if F_statistic more than F_critical, then alternative hypothesis is rejected

Answer

if F_statistic less than F_critical, then null hypothesis is accepted

Question 20

What is RSS?

Accepted Answer

residual sum of squares

Answer

explained sum of squares

Answer

total sum of squares

Question 21

RSS=ESS/TSS

Accepted Answer

False

Answer

True

Question 22

Coefficient of determination (R2)=ESS/TSS

Accepted Answer

True

Answer

False

Question 23

Except of F-test, there are other tests for identification of specification problems. Choose the correct one.

Accepted Answer

Ramsey-test

Answer

Durbin-Watson (DW)-test

Answer

unit root test

Question 24

What is the null hypothesis in the RESET test?

Accepted Answer

there are not omitted regressors

Answer

all regressors are insignificant

Answer

there are unknown omitted regressors

Question 25

What from the following is not a quality criteria of a regression model?

Accepted Answer

p-value

Answer

R-squared-adjusted

Answer

multiple-R-squared

Answer

Schwartz criteria (BIC)

Question 26

The disadvantage of multiple-R-squared is that in unrestricted model it is always higher than in restricted model (with fewer number of regressors)

Accepted Answer

True

Answer

False

Question 27

In more complicated models (unrestricted models) the value of RSS is smaller than in restricted models. Thus, econometricians implement so called penalty for higher number of coefficients, which is R-squared-adjusted.

Accepted Answer

True

Answer

False

Question 28

With the help of R-squared-adjusted we may compare restricted model with unrestricted model. We opt for the model with the lower value of R-squared-adjusted

Accepted Answer

False

Answer

True

Question 29

We opt for a model in which the value of a penalty criteria AIC is smaller

Accepted Answer

True

Answer

False

Question 30

We opt for a model in which the value of a penalty criteria BIC is smaller

Accepted Answer

True

Answer

False

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