Econ chapter 5b
The method of _____ is a method of estimating a linear regression equation by finding the line that minimizes the sum of the squared distances from each sample data point to the sample regression line.
Least squares
Data collected over time is called a _____.
Time series
An unbiased estimator is an estimator that _____.
Produces estimates that are on average equal to the true parameter
Select all that apply: The objective of regression analysis is to find _____.
The straight line that best fits a scatter of data points; Estimates of the true slope and intercept parameters
The level of confidence when the level of significance is 0.05 is _____.
95% confidence
Select all that apply: The regression model expressed as Y = a bX + cX^2 _____.
Has a U shape if b is negative and c is positive; Has a (upside down) U shape is b is positive and c is negative; Can be estimated as a linear regression model by replacing X^2 with a new variable Z that is equal to X^2; Is an example of a non-linear regression model
A regression analysis of Y = a + bX will estimate _____.
Both a and b
A(n) _____ is a data set in which the data on the dependent and explanatory variable are collected from many different firms or industries at a given point in time.
Cross-sectional data set
Select all that apply: Hypothesis testing is a tool that _____.
Determines whether the coefficients are statistically different from 0; Helps to determine if estimates are statistically significant; Makes a probabilistic statement about the true value of a parameter
Select all that apply: The objective of regression analysis is to find _____.
Estimates of the true slope and intercept parameters; The straight line that best fits a scatter of data points
A(n) _____ variable affects the value of the _____ variable.
Explanatory; Dependent
A Type I error is _____.
Finding a parameter estimate significant when its not
If the t-statistic is _____ than the critical value of t, the hypothesis that b = 0 is _____.
Greater, rejected
If the value of R^2 is _____, there is a high correlation between the dependent and independent variables.
High
In the equation Y = a + bx, a is the _____ parameter and b is the _____ parameter.
Intercept; Slope
The coefficient of determination _____.
Measures the fraction of the total variation in the dependent variable that is explained by the regression equation
A _____ allows two or more explanatory variables to explain the variation in the dependent variable.
Multiple regression model
The log-linear regression model can be estimated as a linear regression model by transforming the independent variables to the _____.
Natural log of the variable
A _____ regression model is used when the underlying relation between Y and X plots as a curve, rather than a straight line.
Nonlinear
A quadratic regression model is an example of a _____ regression model.
Nonlinear
A _____ is a coefficient in an equation that determines the exact mathematical relations among the variables in the equation.
Parameter
The _____ is the true regression line. The _____ is the line that best fits the data collected.
Population; Sample
The _____ captures the effects of all the minor unpredictable factors that cannot reasonably be included in the model as explanatory variables.
Random error term
The values of parameters are often obtained by using _____.
Regression analysis
_____ uses data on economic variables to determine a mathematical equation that describes the relationship between the economic variables.
Regression analysis
The _____ is the distribution of the values an estimate can take because the observations of the variables X and Y come from a random sample.
Relative frequency distribution
When plotted on a graph, all data results in a _____.
Scatter diagram
The estimate of b is more likely to be closer to the true value when the variance of the estimate is _____.
Smaller
If an estimated coefficient is far enough away from 0, it is considered to be _____.
Statistically significant
The p-value associated with a t-statistic gives _____.
The exact level of significance for a t-ration associated with a parameter estimate
The F-statistic from a regression estimate provides a measure of _____.
The ratio of explained variation in the dependent variable
T/F: The least-squares estimator of a and b is an unbiased estimator.
True
T/F: The probability of drawing a sample for which the estimate of b is much larger than 0 is very small when the true value of b is actually 0.
True
_____ is an example of a multiple regression equation.
Y = a + bX + cW + dZ
To determine whether an estimate of a coefficient is significantly different from 0, one would test the hypothesis _____.
b = 0
The equation Y = aX^bZ^c is often used in economics because _____.
b and c are elastic
If the t-statistic is greater than the critical value of t, we say _____.
b is statistically significant
The slope parameters in Y = a + bX + cW + dZ are _____.
b, c, and d
The _____ for an F-statistic gives the exact level of significance for the regression equation as a whole.
p-value
