Question 1

When we estimate a regression to determine the relationship between changes in consumption and changes in current income,we find that

Accepted Answer

A) there are no residuals. 
B) the R2 is zero. 
C) the MPC is larger than one. 
D) all of the above 
E) none of the above 
A) there are no residuals. 
B) the R2 is zero. 
C) the MPC is larger than one. 
D) all of the above 
E) none of the above E

Question 2

Which of the following problems would lead an economist to use instrument variable methods?

Accepted Answer

A) the dependent variable has an impact on the independent variable. 
B) there are too few quarters of data. 
C) there are too many independent variables. 
D) the R2 is too high. 
E) the residuals are too small. 
A) the dependent variable has an impact on the independent variable. 
B) there are too few quarters of data. 
C) there are too many independent variables. 
D) the R2 is too high. 
E) the residuals are too small. A

Question 3

A large "T-statistic" tell us that

Accepted Answer

A) a tiny change in the independent variable will cause a relatively large change in the dependent variable. 
B) we do not have enough data to obtain an accurate regression line. 
C) we can be confident that our estimated coefficient is not zero. 
D) we should have included more "lags" in our model. 
E) we have incorrectly switched the dependent and independent variables in our model. 
A) a tiny change in the independent variable will cause a relatively large change in the dependent variable. 
B) we do not have enough data to obtain an accurate regression line. 
C) we can be confident that our estimated coefficient is not zero. 
D) we should have included more "lags" in our model. 
E) we have incorrectly switched the dependent and independent variables in our model. C

Question 4

"Ordinary least squares" is a technique that can be used to

Accepted Answer

A) identify the best model. 
B) determine which variables in a model are endogenous and which are exogenous. 
C) obtain a bar graph showing successive quarterly increases in output. 
D) obtain a line describing consumption behavior in the real world. 
E) determine the direction of causation between consumption and income. 
A) identify the best model. 
B) determine which variables in a model are endogenous and which are exogenous. 
C) obtain a bar graph showing successive quarterly increases in output. 
D) obtain a line describing consumption behavior in the real world. 
E) determine the direction of causation between consumption and income.

Question 5

When estimating a regression line,a high R2‚ tells us we have

Accepted Answer

A) a good fit. 
B) large residuals. 
C) correctly determined the direction of causation. 
D) all of the above 
E) none of the above 
A) a good fit. 
B) large residuals. 
C) correctly determined the direction of causation. 
D) all of the above 
E) none of the above

Question 6

When we use ordinary least squares to determine the relationship between changes in consumption and changes in both current and lagged income,we find that

Accepted Answer

A) only current income influences current consumption. 
B) current income has no impact on current consumption. 
C) consumption is not affected by income in any quarter. 
D) current income,last quarter's income,and income two quarter's ago all have the same impact on current consumption. 
E) current income has a greater impact on consumption than income lagged one quarter. 
A) only current income influences current consumption. 
B) current income has no impact on current consumption. 
C) consumption is not affected by income in any quarter. 
D) current income,last quarter's income,and income two quarter's ago all have the same impact on current consumption. 
E) current income has a greater impact on consumption than income lagged one quarter.

Question 7

A key step in using instrument variable methods is to

Accepted Answer

A) find one or more exogenous variables that influence your dependent variable. 
B) decrease the number of lags in the regression equation. 
C) conduct interviews to determine how accurate your data really is. 
D) run the regression on two different computers to see if the results differ. 
E) eliminate the dependent variable. 
A) find one or more exogenous variables that influence your dependent variable. 
B) decrease the number of lags in the regression equation. 
C) conduct interviews to determine how accurate your data really is. 
D) run the regression on two different computers to see if the results differ. 
E) eliminate the dependent variable.

When we estimate a regression to determine the relationship between changes in consumption and changes in current income,we find that

Which of the following problems would lead an economist to use instrument variable methods?

A large "T-statistic" tell us that

"Ordinary least squares" is a technique that can be used to

When estimating a regression line,a high R2‚ tells us we have

When we use ordinary least squares to determine the relationship between changes in consumption and changes in both current and lagged income,we find that

A key step in using instrument variable methods is to

A Tour of the World

A Tour of the Book

The Goods Market

Financial Markets

Goods and Financial Marketsthe Is-Lm Model

The Labor Market

Putting All Markets Togetherthe As-Ad Model

The Phillips Curve,the Natural Rate of Unemployment,and Inflation

The Crisis

The Facts of Growth

Saving,capital Accumulation,and Output

Technological Progress and Growth

Technological Progress: the Short,the Medium,and the Long Run

Expectations: the Basic Tools

Financial Markets and Expectations

Expectations,consumption,and Investment

Expectations,output,and Policy

Openness in Goods and Financial Markets

The Goods Market in an Open Economy

Output,the Interest Rate,and the Exchange Rate

Exchange Rate Regimes

Should Policy Makers Be Restrained

Fiscal Policy: a Summing up

Monetary Policy: a Summing up

Epilogue: the Story of Macroeconomics

an Introduction to National Income and Product Accounts

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Exam 27: an Introduction to Econometrics

When we estimate a regression to determine the relationship between changes in consumption and changes in current income,we find that

Which of the following problems would lead an economist to use instrument variable methods?

A large "T-statistic" tell us that

"Ordinary least squares" is a technique that can be used to

When estimating a regression line,a high R2‚ tells us we have

When we use ordinary least squares to determine the relationship between changes in consumption and changes in both current and lagged income,we find that

A key step in using instrument variable methods is to

A Tour of the World

A Tour of the Book

The Goods Market

Financial Markets

Goods and Financial Marketsthe Is-Lm Model

The Labor Market

Putting All Markets Togetherthe As-Ad Model

The Phillips Curve,the Natural Rate of Unemployment,and Inflation

The Crisis

The Facts of Growth

Saving,capital Accumulation,and Output

Technological Progress and Growth

Technological Progress: the Short,the Medium,and the Long Run

Expectations: the Basic Tools

Financial Markets and Expectations

Expectations,consumption,and Investment

Expectations,output,and Policy

Openness in Goods and Financial Markets

The Goods Market in an Open Economy

Output,the Interest Rate,and the Exchange Rate

Exchange Rate Regimes

Should Policy Makers Be Restrained

Fiscal Policy: a Summing up

Monetary Policy: a Summing up

Epilogue: the Story of Macroeconomics

an Introduction to National Income and Product Accounts

Filters