Econ 2271

Quiz Week 3

Here are some practice multiple choice questions.

1. Which of the following is known as the coefficient of correlation?
A. r
B. R2
C. β2
D. RSS
2. How could we describe the OLS estimator with the classical assumptions, but without
the normality assumption?
A. BLUE
B. BUE
C. Biased
D. Higher variance than the minimum possible variance of all estimators
3. How would you describe R2 ?
A. The strength of the relationship between Yi and X i
B. The proportion of variation in Yi that is attributable to the regression line
C. The variance of the error terms in the econometric model
D. The significance of the regression
4. Which of the following can be described as a random variable?
A. β1
B. Xi
C. Yi
D. σ2
5. Which of the following is one of the classical assumptions of OLS?
A. Xi is distributed normally
B. µi is distributed homoscedastically
C. Error terms are distributed normally
D. Yi is not a random variable
6. Suppose we know the true value of σ2 . What type of distribution does β̂2 exhibit?
A. Normal
B. t
C. χ2
D. It depends on what we assume about the error distribution
7. Suppose that the data points all fall on the line Y = 40 − 8X , and that there is variation
in X . What is the R 2 of the regression with Y as the dependent variable and X as the
independent variable?
A. 1
B. 0
C. Not defined - math error
D. We need more information

8. Suppose that the data points all fall on the line Y = 40 − 8X , and that there is variation
in X . What is the coefficient of correlation between X and Y ?
A. 1
B. 0
C. Not defined - math error
D. -1

9. Which of the following gives the amount of variation in Y that can be attributed to the
regression line?
A. TSS
B. ESS
C. R2
D. r

10. Why do we use the t distribution when constructing intercept coefficient confidence
intervals?
A. Because we don’t usually assume normality
B. Because it is flatter than the normal curve, so we get slightly wider intervals
C. Because we need to estimate error variance
D. Because the intercept coefficient estimate includes some of the inaccuracy of
the slope coefficient estimate