Question 1

The parameters of an econometric model _____.

Accepted Answer

A)  include all unobserved factors affecting the variable being studied
B)  describe the strength of the relationship between the variable under study and the factors affecting it
C)  refer to the explanatory variables included in the model
D)  refer to the predictions that can be made using the model

Question 2

The term 'u' in an econometric model is usually referred to as the _____.

Accepted Answer

A)  error term
B)  parameter
C)  hypothesis
D)  dependent variable

Question 3

​Random sampling complicates the analysis of cross-sectional data.

Accepted Answer

A) True 
 B)False

Question 4

Given the following econometric model, wage = β0+ β1educ + u, can we eliminate the error term u entirely?

Accepted Answer

A)  Yes, by including other observable factors, such as experience, that can also influence wage.​
B)  Yes, by ensuring that everyone reports wage accurately and truthfully.
C)  No, because education is not always reported accurately.
D)  No, because many factors affect wage, that we cannot even list, let alone observe.

Question 5

​Experimental data are easy to obtain in the social sciences.

Accepted Answer

A) True 
 B)False

Question 6

A cross-sectional data set consists of observations on a variable or several variables over time.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following refers to panel data?

Accepted Answer

A)  Data on the unemployment rate in a country over a 5-year period
B)  Data on the birth rate, death rate and population growth rate in developing countries over a 10-year period.
C)  Data on the income of 5 members of a family on a particular year.
D)  Data on the price of a company's share during a year. B

Question 8

Which of the following terms measures the association between two variables?

Accepted Answer

A)  Casual effect
B)  ​Independence
C)  ​Average
D)  ​Correlation

Question 9

The constants of econometric models are referred to as _____.​

Accepted Answer

A)  ​parameters
B)  ​statistics
C)  ​error terms
D)  ​hypotheses

Question 10

In the following econometric model, wage = β0+ β1educ + u , which of the following factors would not be contained in the term u ?

Accepted Answer

A)  Experience (exper) 
B)  Family background (fback) 
C)  Innate ability (abil) 
D)  Education (educ)

Question 11

An economic model consists of mathematical equations that describe various relationships between economic variables.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a difference between panel and pooled cross-sectional data?

Accepted Answer

A)  A panel data set consists of data on different cross-sectional units over a given period of time while a pooled data set consists of data on the same cross-sectional units over a given period of time.
B)  A panel data set consists of data on the same cross-sectional units over a given period of time while a pooled data set consists of data on different cross-sectional units over a given period of time
C)  A panel data consists of data on a single variable measured at a given point in time while a pooled data set consists of data on the same cross-sectional units over a given period of time.
D)  A panel data set consists of data on a single variable measured at a given point in time while a pooled data set consists of data on more than one variable at a given point in time.

Question 13

An empirical analysis relies on _____ to test a theory.

Accepted Answer

A)  common sense
B)  ethical considerations
C)  data
D)  customs and conventions

Question 14

A data set that consists of a sample of individuals, households, firms, cities, states, countries, or a variety of other units, taken at a given point in time, is called a(n)  _____.

Accepted Answer

A)  cross-sectional data set
B)  longitudinal data set
C)  time series data set
D)  experimental data set

Question 15

Econometrics is the branch of economics that _____.​

Accepted Answer

A)  ​studies the behavior of individual economic agents in making economic decisions
B)  ​develops and uses statistical methods for estimating economic relationships
C)  ​deals with the performance, structure, behavior, and decision-making of an economy as a whole
D)  ​applies mathematical methods to represent economic theories and solve economic problems

Question 16

_____ has a causal effect on _____.

Accepted Answer

A)  Income; unemployment
B)  Height; health
C)  Income; consumption
D)  Age; wage C

Question 17

A data set that consists of observations on a variable or several variables over time is called a _____ data set.

Accepted Answer

A)  binary
B)  cross-sectional
C)  time series
D)  experimental

Question 18

Which of the following is an example of time series data?

Accepted Answer

A)  Data on the unemployment rates in different parts of a country during a year.
B)  Data on the consumption of wheat by 200 households during a year.
C)  Data on the gross domestic product of a country over a period of 10 years.
D)  Data on the number of vacancies in various departments of an organization on a particular month. C

Question 19

Which of the following is true?

Accepted Answer

A)  A variable has a causal effect on another variable if both variables increase or decrease simultaneously.
B)  The notion of 'ceteris paribus' plays an important role in causal analysis.
C)  Difficulty in inferring causality disappears when studying data at fairly high levels of aggregation.
D)  The problem of inferring causality arises if experimental data is used for analysis.

Question 20

Experimental data are sometimes called retrospective data.

Accepted Answer

A) True 
 B)False

Exam 1: The Nature of Econometrics and Economic Data

The parameters of an econometric model _____.

Correct AnswerverifiedShow Answer

The term 'u' in an econometric model is usually referred to as the _____.

Correct AnswerverifiedShow Answer

​Random sampling complicates the analysis of cross-sectional data.

Correct AnswerverifiedShow Answer

Given the following econometric model, wage = β0+ β1educ + u, can we eliminate the error term u entirely?

Correct AnswerverifiedShow Answer

​Experimental data are easy to obtain in the social sciences.

Correct AnswerverifiedShow Answer

A cross-sectional data set consists of observations on a variable or several variables over time.

Correct AnswerverifiedShow Answer

Which of the following refers to panel data?

Correct AnswerverifiedB

Which of the following terms measures the association between two variables?

Correct AnswerverifiedShow Answer

The constants of econometric models are referred to as _____.​

Correct AnswerverifiedShow Answer

In the following econometric model, wage = β0+ β1educ + u , which of the following factors would not be contained in the term u ?

Correct AnswerverifiedShow Answer

An economic model consists of mathematical equations that describe various relationships between economic variables.

Correct AnswerverifiedShow Answer

Which of the following is a difference between panel and pooled cross-sectional data?

Correct AnswerverifiedShow Answer

An empirical analysis relies on _____ to test a theory.

Correct AnswerverifiedShow Answer

A data set that consists of a sample of individuals, households, firms, cities, states, countries, or a variety of other units, taken at a given point in time, is called a(n) _____.

Correct AnswerverifiedShow Answer

Econometrics is the branch of economics that _____.​

Correct AnswerverifiedShow Answer

_____ has a causal effect on _____.

Correct AnswerverifiedC

A data set that consists of observations on a variable or several variables over time is called a _____ data set.

Correct AnswerverifiedShow Answer

Which of the following is an example of time series data?

Correct AnswerverifiedC

Which of the following is true?

Correct AnswerverifiedShow Answer

Experimental data are sometimes called retrospective data.

Correct AnswerverifiedShow Answer

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Random sampling complicates the analysis of cross-sectional data.

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Given the following econometric model, wage = β₀+ β₁educ + u, can we eliminate the error term u entirely?

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Experimental data are easy to obtain in the social sciences.

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B

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The constants of econometric models are referred to as _____.

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In the following econometric model, wage = β₀+ β₁educ + u , which of the following factors would not be contained in the term u ?

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Econometrics is the branch of economics that _____.

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_ has a causal effect on _.

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C

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C

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