2.

A Type I error occurs when we:

A. reject a false null hypothesis

B. reject a true null hypothesis

C. do not reject a false null hypothesis

D. do not reject a true null hypothesis

Answer. B.reject a true null

Hypothesis

4. What would be then

consequences ror the OLSestimator

if heteroscedasticity is present in a

regression model but ignored?

A. It will be ignored

B. It will be inconsistent

C. It will be inefficient

D. All of a),c), b) will be true.

Answer. C.It will be inefficient

5. Which one of the following is

NOT a plausible remedy for near

multi collinearity?

A. Use principal components analysis

B. Drop one of the collinear variables

C. Use a longer run of data

D. Take logarithems of each of the

variables

Answer: D.Take logarithems of each

of the variables

6. What will be the properties of

the OLS estimator in the presence

of multicollinearity?
A. It Will be consistent unbiased and

efficient

B. It will be consistent and unbiased

hut notefficient

C. It will be consistent but not

unmased

D. It will not be consistent

Answer. Alt will be consistent

unbiased and efficient.

8. Autocorrelation is generally

occurred in

A. Cross-section data

B. Time series data

C. pooled data

D. None of the above

Answer. B.Time series data

9. The regression coemcient

estimated in the presence of

autocorrelation in the sample data

are NOT

A. Unbiased estimators

B. Consistent estimators

12. BLUE is

A. Best Linear Unbiased Estimator

B. Best Linear Unconditional

Estima tor

C. Basic Linear

unconditionalEstimator
D. Both b and c

Answer. A.Best Linear Unbiased

Estimator

13. Data on one or variables

collected at a given point of time

A. Panel Data

B. Time series data

C. Pooled data

D. Cross-section data

Answer. D.Cross-section data

14. The violation of the assumption

of constant variance of the residual

is known as

A. Heteroscedasticity

B. Multicollinearity

C. Homoscedasticity

D. Autocorrelation

Answer: A.Heteroscedasticity

15. Formula of coefficient

determination is

A 14Rssrrss

B. I-RSS/ESS

C. I-RSS,rrss

D. I*RSS'TSS

Answer. c. I-Rssrrss

16. In conndence interval

estimation, a 5%, this means that

this interval includes the true

withprobability of
A 0.50%

D. 95%

Answer: D.

17. Consider a large population

with a mean of 160 and a standard

deviation of 25. A random sample

of size 64 is taken from this

population. What is the standard

deviation of the sample mean?

A. 3.125

B. 2.5

25. Which one is not the

assumption of OLS?

A. perfect Mulncollinearity

B. zero covariance between error

terms

C. equal variance Of disturbances

D. Mean value of disturbances is

Answer. A perfect Multicollinearity

26. Scaling a dependent variable in

log form in the log-lin model will

A. change both the intercept an

Slope

31. Pro b ability or occurnence or an

between
c, 1 anao

D. 100and-100

Answer c, 1 and 0

32. A dåsrrete probability

distribution may be represented by

Graph

Table