Answer the following: 1) What is the true relationship between X and Y and what random...

Answer the following:

1) What is the true relationship between X and Y and what random or non-random assumptions do we make about this relationship in order for OLS to be a good estimation method?

2) What 4 assumptions do we need on the error term to make OLS a good estimation method and allow us to do normal hypothesis tests?

3) Briefly describe why OLS is BLUE (proofs not needed).

4) Explain when a null hypothesis is accepted.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

2. Theory gives you the following relationship between variables x and y, y = β0 +...

2. Theory gives you the following relationship between variables x and y, y = β0 + β1x + u. You collect a sample of data on n = 4 sample members. The data are : {x1, y1} = {3, 8},{x2, y2} = {2, 7},{x3, y3} = {1, 6},{x4, y4} = {3, 4} a. State the minimization problem that you need to derive the OLS estimators b. Estimate the relationship between x and y using this sample. What is your estimate...

Answer the following by True(T) or False (F) 1. The short-run relationship between labor supply and...

Answer the following by True(T) or False (F) 1. The short-run relationship between labor supply and real wage is more likely to be represented by an upward-sloping labor supply curve than by a downward-sloping one. 2. The long-run relationship between labor supply and real wage is more likely to be represented by an upward-sloping labor supply curve than by a downward-sloping one. 3. According to the data on the long-run trend of the average number of hours worked, the substitution...

This is the probability distribution between two random variables X and Y: Y \ X 0...

This is the probability distribution between two random variables X and Y: Y \ X 0 1 2 3 0.1 0.2 0.2 4 0.2 0.2 0.1 a) Are those variables independent? b) What is the marginal probability of X? c) Find E[XY]

Find if there is a relationship between education (in years) X and income Y. x 4...

Find if there is a relationship between education (in years) X and income Y. x 4 6 8 11 12 14 16 17 20 y 6000 12000 14000 10000 17000 16000 13000 16000 19000 Make sure that THREE of your posts for the week are Statistical in nature AND a direct response to the problems given in the discussion

Calculate the covariance between variables X and Y. Is it a positive or negative relationship between...

Calculate the covariance between variables X and Y. Is it a positive or negative relationship between the two variables? b. Calculate correlation coefficient between X and Y. Is it a positive or negative relationship? Is it a strong linear, weak linear or nonlinear relationship between X and Y? c. Use the Y data to calculate mean, range, standard deviation and variance. d. Use the first Y value to calculate the Z-score. Is it an outlier? e. Calculate the 60th percentile...

Use the image below to answer the following question. Find the value of sin x° and cos y°. What relationship do the ratios of sin x° and cos y° share?

Contract the scatter plot of these data. Describe relationship between x and y. What type of relationship appears to exist between two variables?

Use the following data: x y 10 3 6 7 9 3 3 8 2 9 8 5 3 7 Contract the scatter plot of these data. Describe relationship between x and y. What type of relationship appears to exist between two variables? (you can copy and past from Excel,SAS,etc) Compute the correlation coefficient r. Test to determine whether the population correlation coefficient is positive. Use the α=0.01 level to conduct test. (calculate test statistics and make conclusion)

Let X and Y be uniform random variables on [0, 1]. If X and Y are...

Let X and Y be uniform random variables on [0, 1]. If X and Y are independent, find the probability distribution function of X + Y

A random variable Y is a function of random variable X, where y=x^2 and fx(x)=(x+1)/2 from...

A random variable Y is a function of random variable X, where y=x^2 and fx(x)=(x+1)/2 from -1 to 1 and =0 elsewhere. Determine fy(y). In this problem, there are two x values for every y value, which means x=T^-1(y)= +y^0.5 and -y^0.5. Be sure you account for both of these. Ans: fy(y)=0.5y^-0.5

Answer by true or false: 1)The relationship between book calue and market price of capital stock...

Answer by true or false: 1)The relationship between book calue and market price of capital stock is a measure of investors’ confidence in a company’s management. 2)When a corporation issues capital stock, most state laws require the corporation to credit Retained Earnings for the par value shares of stock issued. 3)A stock split will normally increase the market price of the stock and decrease the number of shares on the market.

Subjects