Homework Help is Here – Start Your Trial Now!
Math
Probability
State if the following is True or false and provide a brief explanation for your answer. Consider Population model Y = Bo + B1X1+ B2X2 + B3X3 +µ. Now consider the following statements a to c. Assumption MLR 1 – 4 is satisfied if and only if: a. X3has no effect on Y after X, & X, have been controlled for which means ß3 = 0 b. X3 may or maynot be correlated with X, & X,. All that matters is that X, & X, are controlled for X,has no effect on Y. c. Given that ß3 = 0 we are inclined to estimate the equation to include X3. Serial correlation (also called Autocorrelation) is where error terms in a time series transfer from one period to the same period. d. One of the assumptions that needs to hold for the process {yt} to be weakly stationary is that cov(yt,yt-k is constant over time and depends on both t and k.

State if the following is True or false and provide a brief explanation for your answer. Consider Population model Y = Bo + B1X1+ B2X2 + B3X3 +µ. Now consider the following statements a to c. Assumption MLR 1 – 4 is satisfied if and only if: a. X3has no effect on Y after X, & X, have been controlled for which means ß3 = 0 b. X3 may or maynot be correlated with X, & X,. All that matters is that X, & X, are controlled for X,has no effect on Y. c. Given that ß3 = 0 we are inclined to estimate the equation to include X3. Serial correlation (also called Autocorrelation) is where error terms in a time series transfer from one period to the same period. d. One of the assumptions that needs to hold for the process {yt} to be weakly stationary is that cov(yt,yt-k is constant over time and depends on both t and k.

Linear Algebra: A Modern Introduction
Linear Algebra: A Modern Introduction
4th Edition
ISBN:9781285463247
Author:David Poole
Publisher:David Poole
Chapter2: Systems Of Linear Equations
Section2.4: Applications
Problem 1EQ: 1. Suppose that, in Example 2.27, 400 units of food A, 600 units of B, and 600 units of C are placed...
See similar textbooks
icon
Related questions
Question
State if the following is True or false and provide a brief explanation for your answer. Consider Population model Y = Bo + B1X1+ B2X2+ B3X3 + µ. Now consider the following statements a to c. Assumption MLR 1– 4 is satisfied if and only if: a. X,has no effect on Y after X, &X, have been controlled for which means B3 = 0 %3D b. X3 may or maynot be correlated with X, & X,. All that matters is that X, & X, are controlled for X, has no effect on Y. c. Given that B3 = 0 we are inclined to estimate the equation to include X3. Serial correlation (also called Autocorrelation) is where error terms in a time series transfer from one period to the same period. d. One of the assumptions that needs to hold for the process {yt} to be weakly stationary is that cov(yt,yt-k is constant over time and depends on both t and k.
Transcribed Image Text:State if the following is True or false and provide a brief explanation for your answer. Consider Population model Y = Bo + B1X1+ B2X2+ B3X3 + µ. Now consider the following statements a to c. Assumption MLR 1– 4 is satisfied if and only if: a. X,has no effect on Y after X, &X, have been controlled for which means B3 = 0 %3D b. X3 may or maynot be correlated with X, & X,. All that matters is that X, & X, are controlled for X, has no effect on Y. c. Given that B3 = 0 we are inclined to estimate the equation to include X3. Serial correlation (also called Autocorrelation) is where error terms in a time series transfer from one period to the same period. d. One of the assumptions that needs to hold for the process {yt} to be weakly stationary is that cov(yt,yt-k is constant over time and depends on both t and k.
A white noise process is a non-stationary process for which all autocorrelations are equal to zero. e. f. If our series are non-stationary, it is safe to use OLS as our estimation method. g. Heteroscedasticity occurs when the disturbance term in a regression model is correlated with one of the explanatory variables h. In the presence of heteroscedasticity, ordinary lease squares (OLS) is an inefficient estimation technique and this causes t tests and F tests to be invalid. i. Heteroscedasticity can be detected with the Chow test. j. In the presence of autocorrelation, ordinary lease squares (OLS) produce unbiased estimates and hence t tests and F tests are still valid. k. One problem with the use of a lagged dependent variable as an explanatory variable is that it always gives rise to autocorrelation.
Transcribed Image Text:A white noise process is a non-stationary process for which all autocorrelations are equal to zero. e. f. If our series are non-stationary, it is safe to use OLS as our estimation method. g. Heteroscedasticity occurs when the disturbance term in a regression model is correlated with one of the explanatory variables h. In the presence of heteroscedasticity, ordinary lease squares (OLS) is an inefficient estimation technique and this causes t tests and F tests to be invalid. i. Heteroscedasticity can be detected with the Chow test. j. In the presence of autocorrelation, ordinary lease squares (OLS) produce unbiased estimates and hence t tests and F tests are still valid. k. One problem with the use of a lagged dependent variable as an explanatory variable is that it always gives rise to autocorrelation.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Linear Algebra: A Modern Introduction
Linear Algebra: A Modern Introduction
Algebra
ISBN:
9781285463247
Author:
David Poole
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS