Question

34 to 37 true or false

value of the error term is zeru 13 B 32. The larger the sample size, the greater is the likeli coefficient will be larger than the critical t-value, ceteris paribis. Omitted variable error leads to imprecisely estimated coefficients, Specification criteria include looking at theory, t-test, adjusted R-squared, but not to biauu and bias. 33. 35. Irrelevant variables cause biased estimators. tepwise regression is frequently used as a way of determi variable the established theory states should be included. ining whether to include or exclude a 37. dures to identify Sequential specification searches and data mining are not recommended as proce the explanatory variables to include in a regression equation. 38. The R-squared statistic and the F-statistic are not related. 39. The t-statistic is found by dividing the estimated coefficient by it vari 40. The p-value often included in the statistical output from regression equations is based on a on sided t-test. ssay Questions: Answer one question from each part. Twelve points each. t One archers in business and esea e

Answer 1

34) true

Specification criterion is to check which variables should be included or not

35) false

With Inclusion of irrelevant variables , estimators are still unbiased.

36) true

37) true

The inclusion of exclusion of a variable should be strongly backed by the theory , rather than the significance of the variable & effects on R square

38) false

R square & f statistic are linked

39) false

We divide the estimated coefficient by the standard deviation & not by variance

40) false

P value is reported both for one sided & two sided test as per the alternative hypothesis