Chapter 1 (ECON 4223)

Which of the following is the first step in empirical economic analysis?

Specification of an econometric model

Which of the following is true of time series data? a. The time series data is easier to analyze than cross-sectional data. b. The time series data are independent across time. c. The chronological ordering of observations in a time series conveys potentially important information. d. A time series data set consists of observations on a variable or several variables at a given time.

The chronological ordering of observations in a time series conveys potentially important information.

Which of the following is true of experimental data? a. Experimental data are collected in laboratory environments in the natural sciences. b. Experimental data cannot be collected in a controlled environment. c. Experimental data is sometimes called observational data. d. Experimental data is sometimes called retrospective data.

a. Experimental data are collected in laboratory environments in the natural sciences.

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

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

Which of the following refers to panel data? 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. Data on the birth rate, death rate and population growth rate in developing countries over a 10-year period.

Which of the following is true? 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.

b. The notion of 'ceteris paribus' plays an important role in causal analysis.

Which of the following is an example of time series data? 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. Data on the gross domestic product of a country over a period of 10 years.

_____ has a causal effect on _____. a. Income; unemployment b. Height; health c. Income; consumption d. Age; wage

c. Income; consumption

Data on the income of law graduates collected at different times during the same year is _____.

cross-sectional data

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) _____.

cross-sectional data set

Which of the following terms measures the association between two variables? a. Casual effect b. Independence c. Average d. Correlation

d. Correlation

An empirical analysis relies on _____ to test a theory.

data

Econometrics is the branch of economics that

develops and uses statistical methods for estimating economic relationships

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

error term

The parameters of an econometric model _____.

include all unobserved factors affecting the variable being studied

Nonexperimental data is called

observational data

The constants of econometric models are referred to as _____.

parameters

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

time series