Top 50+ Solved Introduction to Econometrics MCQ Questions Answer
Q. Two events, A and B, are said to be mutually exclusive if:
a. P(A | B) = 1
b. P(B | A) = 1
c. P(A and B) = 1
d. P(A and B) = 0
Q. A Type I error occurs when we:
a. reject a false null hypothesis
b. reject a true null hypothesis
c. do not reject a false null hypothesis
d. do not reject a true null hypothesis
Q. What is the meaning of the term "heteroscedasticity"?
a. The variance of the errors is not constant
b. The variance of the dependent variable is not constant
c. The errors are not linearly independent of one another
d. The errors have non- zero mean
Q. What would be then consequences for the OLSestimator if heteroscedasticity is present in a regression model but ignored?
a. It will be ignored
b. It will be inconsistent
c. It will be inefficient
d. All of a),c), b) will be true.
Q. Which one of the following is NOT a plausible remedy for near multicollinearity?
a. Use principal components analysis
b. Drop one of the collinear variables
c. Use a longer run of data
d. Take logarithems of each of the variables
Q. What will be the properties of the OLS estimator in the presence of multicollinearity?
a. It will be consistent unbiased and efficient
b. It will be consistent and unbiased but notefficient
c. It will be consistent but not unbiased
d. It will not be consistent
Q. A sure way of removing multicollinearity from the model is to
a. Work with panel data
b. Drop variables that cause multicollinearity in the first place
c. Transform the variables by first differencing them
d. Obtaining additional sample data
Q. Autocorrelation is generally occurred in
a. Cross-section data
b. Time series data
c. Pooled data
d. None of the above
Q. The regression coefficient estimated in the presence of autocorrelation in the sample data are NOT
a. Unbiased estimators
b. Consistent estimators
c. Efficient estimators
d. Linear estimators
Q. The coefficient of determination, r2 shows
a. Proportion of the variation in the dependent variable Y is explained by the independent variable X
b. Proportion of the variation in the dependent variable X is explained by the independent variable Y
c. Proportion of the variation in ui is explained by the independent variable X
d. Both a and c
Q. BLUE is
a. Best Linear Unbiased Estimator
b. Best Linear Unconditional Estimator
c. Basic Linear UnconditionalEstimator
d. Both b and c
Q. Data on one or variables collected at a given point of time
a. Panel Data
b. Time series data
c. Pooled data
d. Cross-section data
Q. The violation of the assumption of constant variance of the residual is known as
a. Heteroscedasticity
b. Multicollinearity
c. Homoscedasticity
d. Autocorrelation