Question

5. Under the Classical Linear Regression model assumptions, which one of the following is not a required assumption about the error term ui? *

a. There is no multicollinearity in the model

b. The variance of the error term is the same for all values of x.

c. The values of the error term are independent.

d. The error term is normally distributed.

6 If you find a positive value of the correlation coefficient it implies that the slope of the regression line: *

1 point

a. must also be positive

b. can be either negative or positive

c. can be zero

d. cannot be zero

8. Select from the following statements an equivalent expression for saying that the explanatory variable is "non-stochastic"? *

1 point

a. The explanatory variable is partly random

b. The explanatory variable is fixed in repeated samples

c. The explanatory variable is correlated with the errors

d. The explanatory variable always has a value of one

SECTION B: TRUE OR FALSE

State whether the statement is TRUE or FALSE

1. Correlation does not imply causation *

1 point

True

False

2. Panel data combines characteristics of time series and cross-sectional data *

1 point

True

False

3. The population regression function is usually used to estimate the sample regression function. *

1 point

True

False

4. The error term is a proxy of all variable we are aware of and all the variables we are ignorant about which should have been included in the model. *

1 point

True

False

Answer 1

5.Under the Classical Linear Regression model assumptions ,The variance of the error term is the same for all values of x , this assumption is not correct.

6 If you find a positive value of the correlation coefficient it implies that the slope of the regression line must also be positive

8.he explanatory variable is "non-stochastic" means  The explanatory variable is fixed in repeated samples

9. It is true that correlation does not imply causation all the time as if two things are correlated that does not mean one will be the cause of others

10. It is true that Panel data combines characteristics of time series and cross-sectional data

11. Actially the sample regression function is used to estimate population regression function thus the above statement is false.

12. It is true that The error term is a proxy of all variable we are aware of and all the variables we are ignorant about which should have been included in the model