Final Flashcards
A cross-sectional data set consists of…
observations on a variable or several variables taken at a given point in time
A time series data set consists of…
observations on a variable or several variables over time
Econometrics is the branch of economics that…
develops and uses statistical methods for estimating economic relationships
What is correlation coefficient?
A natural measure of the association between two random variables
In general, the _____ that produces the smallest sum of squared deviations is always the _______
constant, sample average
True or false: standard errors must always be positive
True
What is the general t-statistic formula?
t = (estimate - hypothesized value) / standard error
What is the significance level of a test?
the probability of rejecting the null hypothesis when it is true
When is a quadratic regression used?
used when a numerical predictor has a curvilinear relationship with the response
What is true about extrapolation?
can give bad predictions if the conditions do not hold outside the observed range of X’s
What is multicollinearity?
Problem that can occur when the information provided by several predictors overlaps
What is R2?
Proportion of the variability in the dependent variable explained by the regression model
When are dummy variables used?
Used in a regression model to represent categorical variables
What is a fitted equation?
Estimated regression line
What is interaction?
Used when the effect of a predictor on the response depends on other predictors
