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- Consider a data set with 15 observations and consider a multiple linear regression model with 7 in-dependent variables. Assume you have estimated the model and you find that SST = 1,325 and SSR = 794.Which of the following is a consequence of severe multicollinearity in a regression model? A. High standard errors for the estimated coefficientsB. Lower standard errors for the estimated coefficientsC. The OLS estimator becomes biasedD. The dependent variable becomes constantTrue or False For a linear regression model including only an intercept, the OLS estimator of that intercept is equal to the sample mean of the independent variable.
- The estimated regression models having a different number of explanatory variables are compared on the basis of _____. Select one: a. Chi squared -statistic b. Adjusted R squared-statistic c. R squared-statistic d. None of the aboveA simple regression analysis to estimate the demand for Chick-fil-A’s new premium super-sized spicy chicken sandwich is Q= 48-2p. If Chick-fil-A sets the price at $12 and Q=20, calculate the regression’s error term? Also, list five assumptions of the classical linear regression model.In a regression problem with 1 output variable and with a total number of 100 possible input variables, what is the number of all possible models with three input variables?
- Consider the simple regression model: y=0.56+1.56x+u Using this and assuming the estimated Var(y)=0.64 and the estimated Var(x)=3.07, what is the estimated Var(x+y)?Enumerate the 10 assumptions of the classical linear regression model (CLRM) and discuss its importance in econometrics analysis.Consider the regression model Yi = β0 + β1X1i + β2X2i + β3(X1i * X2i) +ui. a. ΔY>/ΔX1 = β1 + β3X2 (effect of change in X1, holding X2 constant).b. ΔY/ΔX2 = β2 + β3X1 (effect of change in X2, holding X1 constant).c. If X1 changes by ΔX1 and X2 changes by ΔX2, then ΔY =(β1+β3X2)ΔX1 + (β2 + β3X1)ΔX2 + β3ΔX1ΔX2.
- In regression analysis, a common metric used in assessing the quality of the model being used to fit the data is known as the R-squared coefficient. Explain the R-squared coefficient. What is the difference between the R-squared and adjusted R-squared coefficients?All the regression assumptions lie on the residuals, for both simple and multiple regression. True or False?The assumption that the error terms in a regression model follow the normal distribution with zero mean and constant variance is required Select one: Estimation of the regression model using OLS method Point estimation of the parameters Hypothesis testing and inference Inference One of the assumption of CLRM is that the number of observations in the sample must me greater the number of Select one: Dependent and independent variable Dependent Variable Regressor Regressands Information about numerical values of variables from period to period is Select one: Time series data Pooled data Panel data Cross section data Multicollinearity is essentially a Select one: Sample phenomenon or population phenomenon sample phenomenon Sample phenomenon and population phenomenon Population phenomenon The larger the standard error of the estimator, the greater is the uncertainty of estimating the true value of the unknown parameters. This statement is Select one: True False