QUESTION 34
We are analyzing the effects of regime type on corruption rates
with the following model: Corruption = 10 - 0.1 GDP (per capita) -
2.0Democracy where Corruption is an index of corruption, GDP (per
capita) is measured in thousands of dollars, and Democracy is a
dummy variable that is equal to one if a country is a democracy and
0 otherwise. What is the expected rate of corruption of a
democratic country with a per capita GDP of $50,000?
A. 8.5
B. Not enough information to come up with
an answer
C. 13.0
D. - 4992
2.5 points
QUESTION 35
We are analyzing the effects of regime type on corruption rates
with the following model: Corruption = 10 - 0.1 GDP (per capita) -
2.0Democracy where Corruption is an index of corruption, GDP (per
capita) is measured in thousands of dollars, and Democracy is a
dummy variable that is equal to one if a country is a democracy and
0 otherwise. Suppose we want to know the estimated effect on
corruption of an extra thousand dollars per capita for a democratic
country. Our estimate implies the change in predicted corruption
will be
A. 0.1 higher
B. 2.1 higher
C. 2.1 lower
D. 0.1 lower
2.5 points
QUESTION 36
We are analyzing the effects of regime type on corruption rates
with the following model: Corruption = 10 - 0.1 GDP (per capita) -
2.0Democracy where Corruption is an index of corruption, GDP (per
capita) is measured in thousands of dollars, and Democracy is a
dummy variable that is equal to one if a country is a democracy and
0 otherwise. What is the expected rate of corruption of a
democratic country with a per capita GDP of $50,000?
A. 13.0
B. Not enough information to come up with
an answer
C. 8.5
D. - 4992
2.5 points
QUESTION 37
When dealing with categorical variables in the context of a
multivariate regression, we:
A. Change the categorical variable into a
dummy variable (per category) and include all of the dummy
variables in the regression.
B. Include the categorical variable
directly into the model and interpret the results
C. Interact the categorical variable with
a continuous variable.
D. Change the categorical variable into a
dummy variable (per category) and include all but one of the dummy
variables in the regression.
2.5 points
QUESTION 38
Which of the following are consequences of measurement error in the
dependent variable?
A. Smaller R2
B. Biased coefficient estimates
C. The bigger the measurement error, the
bigger the variance of the error term.
D. Both A and C
2.5 points
QUESTION 39
Which of the following is NOT a categorical variable:
A. Car manufacturer
B. Level of Education
C. Region
D. Race
2.5 points
QUESTION 40
Which of the following will tend to reduce the size of a confidence
interval?
A. Decrease the standard deviation of the
population
B. Decrease the significance level
(alpha).
C. You can't do anything to reduce the
interval
D. Increase the sample size
Statistics and Probability
QUESTION 34
We are analyzing the effects of regime
type on corruption rates with the following model: Corruption = 10
- 0.1 GDP (per capita) - 2.0Democracy where Corruption is an index
of corruption, GDP (per capita) is measured in thousands of
dollars, and Democracy is a dummy variable that is equal to one if
a country is a democracy and 0 otherwise. What is the expected rate
of corruption of a democratic country with a per capita GDP of
$50,000?
A. 8.5
B. Not enough information to come up with
an answer
C. 13.0
D. –
4992
2.5 points
Explanation:
The fitted model is
Corruption = 10 - 0.1 GDP (per capita) - 2.0Democracy
Using above model, the expected rate of corruption of a democratic country with a per capita GDP of $50,000 is calculated as
Corruption = 10 - 0.1*50,000- 2.0(1)=-4992
QUESTION 35
We are analyzing the effects of regime
type on corruption rates with the following model: Corruption = 10
- 0.1 GDP (per capita) - 2.0Democracy where Corruption is an index
of corruption, GDP (per capita) is measured in thousands of
dollars, and Democracy is a dummy variable that is equal to one if
a country is a democracy and 0 otherwise. Suppose we want to know
the estimated effect on corruption of an extra thousand dollars per
capita for a democratic country. Our estimate implies the change in
predicted corruption will be
A. 0.1
higher
B. 2.1 higher
C. 2.1 lower
D.
0.1 lower
2.5 points
Explanation: We have coefficient of GDP (per capita) =-0.1, thus unit change in GDP (per capita) will bring Corruption down by 0.1 times.
QUESTION 36
We are analyzing the effects of regime
type on corruption rates with the following model: Corruption = 10
- 0.1 GDP (per capita) - 2.0Democracy where Corruption is an index
of corruption, GDP (per capita) is measured in thousands of
dollars, and Democracy is a dummy variable that is equal to one if
a country is a democracy and 0 otherwise. What is the expected rate
of corruption of a democratic country with a per capita GDP of
$50,000?
A. 13.0
B. Not enough information to come up with
an answer
C. 8.5
D. –
4992
2.5 points
Explanation:
The fitted model is
Corruption = 10 - 0.1 GDP (per capita) - 2.0Democracy
Using above model, the expected rate of corruption of a democratic country with a per capita GDP of $50,000 is calculated as
Corruption = 10 - 0.1*50,000- 2.0(1)=-4992
QUESTION 37
When dealing with categorical
variables in the context of a multivariate regression, we:
A. Change the categorical variable into a
dummy variable (per category) and include all of the dummy
variables in the regression.
B. Include the categorical variable
directly into the model and interpret the results
C. Interact the categorical variable with
a continuous variable.
D.
Change the categorical variable into a dummy variable (per
category) and include all but one of the dummy variables in the
regression.
2.5 points
Answer: D. Change the categorical variable into a dummy variable (per category) and include all but one of the dummy variables in the regression.
QUESTION 38
Which of the following are consequences of measurement error in the
dependent variable?
A. Smaller R2
B. Biased coefficient estimates
C. The bigger the measurement error, the
bigger the variance of the error term.
D.
Both A and C
2.5 points
Answer: D. Both A and C
QUESTION 39
Which of the following is NOT a categorical variable:
A.
Car manufacturer
B. Level of Education
C. Region
D. Race
2.5 points
Answer: A. Car manufacturer
QUESTION 40
Which of the following will tend to reduce the size of a confidence
interval?
A.
Decrease the standard deviation of the population
B. Decrease the significance level
(alpha).
C. You can't do anything to reduce the
interval
D. Increase the sample size
Answer:
A. Decrease the standard deviation of the
population
QUESTION 34 We are analyzing the effects of regime type on corruption rates with the following...
Consider the following estimated model for the year 2010: In(GDP pe;) = 9.83 (1.10) 3.26 Africa; + 1.44 Europe;. (1.58) (0.66) where the variable "GDP pe" denotes GDP per capita. The dummy variables Africa=1 if the country is in Africa and 0 otherwise, and Europe=1 if the country is in Europe and 0 otherwise. What is the difference between In(GDP pc) of Europe and Africa on average? a. 6.57. b.4.70. O c. 9.83. d. 8.01. e. 8.39.
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We are interested in the relationship between the compensation of Chief Executive Officers (CEO) of firms and the return on equity of their respective firm, using the dataset salary.xlsx. The variable salary shows the annual salary of a CEO in thousands of dollars, so that y = 150 indicates a salary of $150,000. Similarly, the variable ROE represents the average return on equity (ROE) for the CEO’s firm for the previous three years. A ROE of 20 indicates an average...