Deck 1: An Introduction to Econometrics

Question 1

What does it mean for a panel data set to be balanced?

A)males and females are equally represented in the sample
B)the observations are equally split before and after the event being studied
C)the number of observations in the treatment and control group are equal
D)each unit of observation is observed for the same number of time periods

Answer 1

D

Question 2

Economic theory provides a basis for which variables are relevant and should be included in an econometric model.But econometrics provides tools to estimate ____________________ which tells us ________________________________.

A)a model,the functional form that should be used.
B)causality,why it happens that way
C)a parameter,how much or to what degree things change.
D)variables,the probability of a specific outcome.

Answer 2

C

Question 3

Which of the following variables is most likely to be quantitative?

A)gender
B)education
C)income
D)employment

Answer 3

C

Question 4

Which of the following sections usually comes first in a research report?

A)state of problem
B)description of data
C)review of literature on the topic
D)economic model

Question 5

What does NBER stand for?

A)Northern Banks Emergency Reserves
B)Normally Balanced Econometric Regression
C)National Bureau of Economic Research
D)National Business and Economic Regulators

Question 6

Which of the following is NOT generally included in the study of econometrics?

A)using economic data to estimate relationships
B)testing economic hypotheses
C)predicting economic outcomes
D)developing new economic relationships.

Question 7

Which regional Federal Reserve Bank provides access to large amounts of economic data through FRED?

A)Boston
B)New York
C)San Francisco
D)St.Louis

Question 8

Consider the following model: Q^d = f(P,P^s,P^c,INC)
Where Q^d is quantity demanded of a particular product per month,P is the price of the product,P^s is the price of substitutes,P^c is the price of complements,and INC is monthly income.
This equation represents

A)a non-linear model
B)an economic model
C)an econometric model
D)a challenge to the law of demand.

Question 9

The parameters estimated using econometric methods are generally used for ___________________ or _____________________.

A)testing hypotheses,predicting
B)confirming,denying effects of policy.
C)validation,repudiation.
D)generating data,probability distributions.

Question 10

Why is a random error term included in an econometric model?

A)because many economic models have not been well developed yet and need to allow for inaccuracies
B)because some people are irrational
C)because there is intrinsic uncertainty in any economic activity due to individual decision making
D)because most estimating techniques are not well suited to work with a deterministic model.

Question 11

Suppose you stand outside a store and randomly give some shoppers coupons as they enter while other shoppers receive none.You then record how much each shopper spends in the store.The data you collect are

A)survey data
B)random data
C)experimental data
D)selective data

Question 12

Refer to the following equation: Q^s = $\beta$ ₁ + $\beta$ ₂P + $\beta$ ₃P^r + $\beta$ ₄P^s + $\beta$ ₅TAX + e
Where Q^s is annual quantity supplied,P is the price of the product,P^r is the price of resources,P^s is the price of goods that are substitutes in production,and TAX is the excise tax on the product.This equation is

A)an economic model
B)an econometric model
C)a market model
D)a non-linear model

Question 13

Of the following steps in conducting empirical economic research,which one should be performed last?

A)find appropriate data that can be used for estimation
B)build an economic model guided by economic theory
C)evaluate and analyze the consequences and implications of the results
D)estimate parameters and test hypotheses

Question 14

Refer to the following equation: Q^s = $\beta$ ₁ + $\beta$ ₂P + $\beta$ ₃P^r + $\beta$ ₄P^s + $\beta$ ₅TAX + e
Where Q^s is annual quantity supplied,P is the price of the product,P^r is the price of resources,P^s is the price of goods that are substitutes in production,and TAX is the excise tax on the product.In this equation $\beta$ ₁ represents

A)a parameter to be estimated
B)the random error term
C)the predicted quantity supplied
D)the equilibrium quantity