Introduction to Econometrics Solved MCQs

Take a Test Download as PDF

1.	Two events, A and B, are said to be mutually exclusive if:
A.	P(A \| B) = 1
B.	P(B \| A) = 1
C.	P(A and B) = 1
D.	P(A and B) = 0
Answer» D. P(A and B) = 0

discuss

2.	A Type I error occurs when we:
A.	reject a false null hypothesis
B.	reject a true null hypothesis
C.	do not reject a false null hypothesis
D.	do not reject a true null hypothesis
Answer» B. reject a true null hypothesis

discuss

3.	What is the meaning of the term "heteroscedasticity"?
A.	The variance of the errors is not constant
B.	The variance of the dependent variable is not constant
C.	The errors are not linearly independent of one another
D.	The errors have non- zero mean
Answer» A. The variance of the errors is not constant

discuss

4.	What would be then consequences for the OLS estimator if heteroscedasticity is present in a regression model but ignored?
A.	It will be ignored
B.	It will be inconsistent
C.	It will be inefficient
D.	All of a),c), b) will be true.
Answer» C. It will be inefficient

discuss

5.	Which one of the following is NOT a plausible remedy for near multicollinearity?
A.	Use principal components analysis
B.	Drop one of the collinear variables
C.	Use a longer run of data
D.	Take logarithems of each of the variables
Answer» D. Take logarithems of each of the variables

discuss

6.	What will be the properties of the OLS estimator in the presence of multicollinearity?
A.	It will be consistent unbiased and efficient
B.	It will be consistent and unbiased but not efficient
C.	It will be consistent but not unbiased
D.	It will not be consistent
Answer» A. It will be consistent unbiased and efficient

discuss

7.	A sure way of removing multicollinearity from the model is to
A.	Work with panel data
B.	Drop variables that cause multicollinearity in the first place
C.	Transform the variables by first differencing them
D.	Obtaining additional sample data
Answer» B. Drop variables that cause multicollinearity in the first place

discuss

8.	Autocorrelation is generally occurred in
A.	Cross-section data
B.	Time series data
C.	Pooled data
D.	None of the above
Answer» B. Time series data

discuss ⁽¹⁾

9.	The regression coefficient estimated in the presence of autocorrelation in the sample data are NOT
A.	Unbiased estimators
B.	Consistent estimators
C.	Efficient estimators
D.	Linear estimators
Answer» C. Efficient estimators

discuss

10.	In the regression function y=α + βx +c
A.	x is the regressor
B.	Y is the regressor
C.	x is the regressand
D.	none of these
Answer» A. x is the regressor

discuss

11.	The coefficient of determination, r2 shows
A.	Proportion of the variation in the dependent variable Y is explained by the independent variable X
B.	Proportion of the variation in the dependent variable X is explained by the independent variable Y
C.	Proportion of the variation in ui is explained by the independent variable X
D.	Both a and c
Answer» A. Proportion of the variation in the dependent variable Y is explained by the independent variable X

discuss

12.	BLUE is
A.	Best Linear Unbiased Estimator
B.	Best Linear Unconditional Estimator
C.	Basic Linear Unconditional Estimator
D.	Both b and c
Answer» A. Best Linear Unbiased Estimator

discuss

13.	Data on one or variables collected at a given point of time
A.	Panel Data
B.	Time series data
C.	Pooled data
D.	Cross-section data
Answer» D. Cross-section data

discuss

14.	The violation of the assumption of constant variance of the residual is known as
A.	Heteroscedasticity
B.	Multicollinearity
C.	Homoscedasticity
D.	Autocorrelation
Answer» A. Heteroscedasticity

discuss

15.	Formula of coefficient determination is
A.	1+RSS/TSS
B.	1-RSS/ESS
C.	1-RSS/TSS
D.	1*RSS/TSS
Answer» C. 1-RSS/TSS

discuss

16.	In confidence interval estimation, α = 5%, this means that this interval includes the true β with probability of
A.	0.50%
B.	50%
C.	5%
D.	95%
Answer» D. 95%

discuss

17.	Consider a large population with a mean of 160 and a standard deviation of 25. A random sample of size 64 is taken from this population. What is the standard deviation of the sample mean?
A.	3.125
B.	2.5
C.	3.75
D.	5.625
Answer» A. 3.125

discuss

18.	In the case of multicollinearity which test will be insignificant?
A.	f test
B.	t test
C.	both a and b
D.	both are significant
Answer» B. t test

discuss

19.	Hetroscedasticity is generally occurred in
A.	Cross-section data
B.	Time series data
C.	Pooled data
D.	None of the above
Answer» A. Cross-section data

discuss

20.	When there are both qualitative and quantitative variables are there in the model,
A.	ANOVA
B.	ANCOVA
C.	CHI SQUARE
D.	All of the above
Answer» B. ANCOVA

discuss

21.	When is the problem of dummy variable trap occur?
A.	When we take dummy variables more than the categories
B.	When we take dummy variables less than the categories
C.	When we take dummy variables equal to the no of categories
D.	Both a and c
Answer» D. Both a and c

discuss

22.	Durbin Watson test is associated with:
A.	Heteroscedasticity
B.	Multicollinearity
C.	Autocorrelation
D.	Both a and c
Answer» C. Autocorrelation

discuss

23.	All are the types of specification errors EXCEPT:
A.	Omission of relevant variable
B.	Inclusion of unnecessary variable
C.	errors of measurement
D.	over identified
Answer» D. over identified

discuss

24.	White's test is used for the detection of ---------- -?
A.	multicollinearity
B.	hetroscedasticity
C.	Autocorrelation
D.	None of the above
Answer» B. hetroscedasticity

discuss

25.	Which one is not the assumption of OLS?
A.	Perfect Multicollinearity
B.	zero covariance between error terms
C.	equal variance of disturbances
D.	Mean value of disturbances is
Answer» A. Perfect Multicollinearity

discuss

26.	Scaling a dependent variable in log form in the log-lin model will------------
A.	change both the intercept and slope
B.	change the slope but not the intercept
C.	change the intercept but not the slope
D.	intercept and slope both remains unchanged
Answer» C. change the intercept but not the slope

discuss

27.	Individual respondents, focus groups, and panels of respondents are categorised as
A.	Primary Data Sources
B.	Secondary Data Sources
C.	Itemized Data Sources
D.	Pointed Data Sources
Answer» A. Primary Data Sources

discuss

28.	The scale applied in statistics which imparts a difference of magnitude and proportions is considered as
A.	Exponential Scale
B.	Goodness Scale
C.	Ratio Scale
D.	Satisfactory Scale
Answer» C. Ratio Scale

discuss

29.	Homogeneity of three or more population correlation coefficients can be tested by
A.	F-test
B.	t-test
C.	Z-test
D.	χ2-test
Answer» D. χ2-test

discuss

30.	The successive trials are with replacement in
A.	Hypergeometric distribution
B.	Binomial distribution
C.	Geometric distribution
D.	None of these
Answer» B. Binomial distribution

discuss

31.	Probability of occurrence of an event lies between
A.	−1 and 0
B.	−1 and 1
C.	1 and 0
D.	100 and -100
Answer» C. 1 and 0

discuss

32.	A discrete probability distribution may be represented by
A.	Graph
B.	Table
C.	Mathematical Equation
D.	All of These
Answer» D. All of These

discuss

33.	Student’s t-distribution curve is symmetrical about mean, it means that
A.	Odd Order Moments are Zero
B.	Even Order Moments are Zero
C.	Both (A) and (B)
D.	None of (A) and (B)
Answer» A. Odd Order Moments are Zero

discuss

34.	Which one is equal to explained variation divided by total variation?
A.	Sum of squares due to regression
B.	Coefficient of Determination
C.	Standard Error of Estimate
D.	Coefficient of Correlation
Answer» B. Coefficient of Determination

discuss

Introduction to Econometrics Solved MCQs

Two events, A and B, are said to be mutually exclusive if:

A Type I error occurs when we:

What is the meaning of the term "heteroscedasticity"?

What would be then consequences for the OLS estimator if heteroscedasticity is present in a regression model but ignored?

Which one of the following is NOT a plausible remedy for near multicollinearity?

What will be the properties of the OLS estimator in the presence of multicollinearity?

A sure way of removing multicollinearity from the model is to

Autocorrelation is generally occurred in

The regression coefficient estimated in the presence of autocorrelation in the sample data are NOT

In the regression function y=α + βx +c

The coefficient of determination, r2 shows

BLUE is

Data on one or variables collected at a given point of time

The violation of the assumption of constant variance of the residual is known as

Formula of coefficient determination is

In confidence interval estimation, α = 5%, this means that this interval includes the true β with probability of

Consider a large population with a mean of 160 and a standard deviation of 25. A random sample of size 64 is taken from this population. What is the standard deviation of the sample mean?

In the case of multicollinearity which test will be insignificant?

Hetroscedasticity is generally occurred in

When there are both qualitative and quantitative variables are there in the model,

When is the problem of dummy variable trap occur?

Durbin Watson test is associated with:

All are the types of specification errors EXCEPT:

White's test is used for the detection of ---------- -?

Which one is not the assumption of OLS?

Scaling a dependent variable in log form in the log-lin model will------------

Individual respondents, focus groups, and panels of respondents are categorised as

The scale applied in statistics which imparts a difference of magnitude and proportions is considered as

Homogeneity of three or more population correlation coefficients can be tested by

The successive trials are with replacement in

Probability of occurrence of an event lies between

A discrete probability distribution may be represented by

Student’s t-distribution curve is symmetrical about mean, it means that

Which one is equal to explained variation divided by total variation?