Econometrics is the branch of economics that _____.
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
ANSWER:
b
RATIONALE:
FEEDBACK: Econometrics is the branch of economics that develops and uses statistical methods for estimating economic relationships.
POINTS:
1
DIFFICULTY:
Easy
NATIONAL STANDARDS:
United States - BUSPROG: Analytic
TOPICS:
What is Econometrics?
KEYWORDS:
Bloom’s: Knowledge
2. Nonexperimental data is called _____.
cross-sectional data
observational data
time series data
panel data
FEEDBACK: Nonexperimental data is called observational data.
3. Which of the following is true of experimental data?
Experimental data are collected in laboratory environments in the natural sciences.
Experimental data cannot be collected in a controlled environment.
Experimental data is sometimes called observational data.
Experimental data is sometimes called retrospective data.
a
FEEDBACK: Experimental data are collected in laboratory environments in the natural sciences.
4. An empirical analysis relies on _____ to test a theory.
common sense
ethical considerations
data
customs and conventions
c
FEEDBACK: An empirical analysis relies on data to test a theory.
Steps in Empirical Economic Analysis
5. The term ‘u’ in an econometric model is usually referred to as the _____.
error term
parameter
hypothesis
dependent variable
FEEDBACK: The term u in an econometric model is called the error term or disturbance term.
6. The constants of econometric models are referred to as _____.
parameters
statistics
error terms
hypotheses
FEEDBACK: The constants of econometric models are referred to as parameters.
Bloom's: Knowledge
7. The parameters of an econometric model _____.
include all unobserved factors affecting the variable being studied
describe the strength of the relationship between the variable under study and the factors affecting it
refer to the explanatory variables included in the model
refer to the predictions that can be made using the model
FEEDBACK: The parameters of an econometric model describe the direction and strength of the relationship between the variable under study and the factors affecting it.
8. Which of the following is the first step in empirical economic analysis?
Collection of data
Statement of hypotheses
Specification of an econometric model
Testing of hypotheses
FEEDBACK: The first step in empirical economic analysis is the specification of the econometric model.
9. 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
longitudinal data set
time series data set
experimental data set
FEEDBACK: 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 cross-sectional data set.
The Structure of Economic Data
10. Data on the income of law graduates collected at different times during the same year is _____.
panel data
experimental data
time series data
cross-sectional data
d
FEEDBACK: 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 cross-sectional data set. Therefore, data on the income of law graduates on a particular year are examples of cross-sectional data.
United States - BUSPROG: Analytic - BUSPROG: Analytic
Bloom’s: Application
11. A data set that consists of observations on a variable or several variables over time is called a _____ data set.
binary
cross-sectional
time series
experimental
FEEDBACK: A time-series data set consists of observations on a variable or several variables over time.
12. Which of the following is true of time series data?
The time series data is easier to analyze than cross-sectional data.
The time series data are independent across time.
The chronological ordering of observations in a time series conveys potentially important information.
A time series data set consists of observations on a variable or several variables at a given time.
FEEDBACK: The chronological ordering of observations in a time series conveys potentially important information.
Moderate
13. Which of the following is an example of time series data?
Data on the unemployment rates in different parts of a country during a year.
Data on the consumption of wheat by 200 households during a year.
Data on the gross domestic product of a country over a period of 10 years.
Data on the number of vacancies in various departments of an organization on a particular month.
FEEDBACK: A time-series data set consists of observations on a variable or several variables over time. Therefore, data on the gross domestic product of a country over a period of 10 years is an example of time series data.
14. Which of the following refers to panel data?
Data on the unemployment rate in a country over a 5-year period
Data on the birth rate, death rate and population growth rate in developing countries over a 10-year period.
Data on the income of 5 members of a family on a particular year.
Data on the price of a company’s share during a year.
FEEDBACK: A panel data set consists of a time series for each cross-sectional member in the data set. Therefore, data on the birth rate, death rate and infant mortality rate in developing countries over a 10-year period refers to panel data.
15. Which of the following is a difference between panel and pooled cross-sectional data?
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.
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
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.
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.
FEEDBACK: 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 the same cross-sectional units over a given period of time.
16. _____ has a causal effect on _____.
Income; unemployment
Height; health
Income; consumption
Age; wage
FEEDBACK: Income has a causal effect on consumption because an increase in income leads to an increase in consumption.
Causality and the Notion of Ceteris Paribus in Econometric Analysis
17. Which of the following is true?
A variable has a causal effect on another variable if both variables increase or decrease simultaneously.
The notion of ‘ceteris paribus’ plays an important role in causal analysis.
Difficulty in inferring causality disappears when studying data at fairly high levels of aggregation.
The problem of inferring causality arises if experimental data is used for analysis.
FEEDBACK: The notion of ‘ceteris paribus’ plays an important role in causal analysis.
18. Which of the following terms measures the association between two variables?
Casual effect
Independence
Average
Correlation
FEEDBACK: The association between two variables are measured by correlation.
Bloom's: Comprehension
19. Experimental data are sometimes called retrospective data.
True
False
FEEDBACK: Nonexperimental data are sometimes called retrospective data.
20. Experimental data are easy to obtain in the social sciences.
FEEDBACK: Experimental data are more difficult to obtain in the social sciences.
21. An economic model consists of mathematical equations that describe various relationships between economic variables.
FEEDBACK: An economic model consists of mathematical equations that describe various relationships between economic variables.
22. Random sampling complicates the analysis of cross-sectional data.
FEEDBACK: An important feature of cross-sectional data is that we can often assume that they have been obtained byrandom samplingfrom the underlying population and it simplifies the analysis of cross-sectional data.
23. A cross-sectional data set consists of observations on a variable or several variables over time.
FEEDBACK: A time series data set consists of observations on a variable or several variables over time.
24. A time series data is also called a longitudinal data set.
FEEDBACK: A panel data is also called a longitudinal data set.
25. The notion ofceteris paribusmeans “other factors being equal.”
FEEDBACK: The notion of ceteris paribus means “other factors being equal.”
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