Question

Four useful criteria for the inclusion of a vanoore 4.( 5.( Leaving an important variable out of a regression equation violates Classical Assumption I. ) "Data mining" is a technique recommended by Studenmund for choosing the best specification of a regression equation. The Ramsey RESET test, the Schwartz Criterion, and Akaike's Information Criterion are formal specification criteria used by econometricians Suppressing the constant term leads to a violation of Classical Assumption II. The choice of a functional form should be made without regard for the underlying economic 6.( 7.( 8.( 9.( +hann include the double-log, semilog, polynomial, 456
t or f

Answer 1

Q 4 & 9 are not completely visible so not answering.

Ans 5. False. Leaving an important variable out violates Classical Assumption III and NOT Classical Assumption II.

Ans 6. False. Since Data Mining involves estimating a variety of alternative specifications before the "best" equation has been chosen.

Ans 7. True. These are the three most popular specification criterion.

Ans 8. True. Classical assumption II is not violated only if the constant term absorbs any non-zero mean that the observations of the error term might have.