What is the disposable income

Assignment Help Econometrics

Reference no: EM131880086

Econometrics Assignment

1. In a linear regression equation of the form ln Y_i = β₀ +β₁lnX_i+u_i,the slope parameter β₁ shows

a. ΔY/ΔX

b. the percentage change in Y for a 1 percentage change in X

c. the elasticity of Y with respect to X

d. the elasticity of X with respect to Y

e. ΔX/ΔY

2. In a linear regression equation of the form Y = α + βX + u, the intercept parameter α shows

a. the amount that Y changes when X changes by one unit

b. the amount that X changes when Y changes by one unit

c. the value of X when Y is zero

d. the value of Y when X is zero

3. In a linear regression equitation of the form Y = αX^βe^u, the slope parameter β shows

a. ΔY/ΔX

b. the elasticity of Y with respect to X

c. the percentage change in Y for a 1 percentage change in X

d. the elasticity of X with respect to Y

e. ΔX/ΔY

4. To test the null hypothesis that the value of a particular regression parameter is zero, one uses ____

a. the F-statistic.

b. the t-statistic

c. R²-statistic

d. the standard error statistic

5. To test whether the overall regression model is significant, one uses ____

a. the F-statistic.

b. the t-statistic

c. R²-statistic

d. the standard error statistic

6. Which of the following statements is FALSE about economic theory?

a. Economic theory makes statement or hypothesis that are mostly qualitative in nature.

b. Economic theory postulates a negative or a positive relationship between the variables it involves.

c. Economic theory specifies the list of explanatory variables on the right side of an equation explaining an economic (phenomenon) relationship.

d. Economic theory can provide a numerical measure of the relationship between the variables it involves.

e. All statementsare TRUE.

7. Which of the following statements is FALSE about economic theory?

a. Economic theory specifies the list of explanatory variables on the right side of an equation explaining an economic (phenomenon) relationship.

b. Economic theory postulates whether the underlying relationship is positive or negative.

c. Economic theory makes statement or hypothesis that are mostly qualitative in nature.

d. Economic theory can provide a numerical measure of the relationship between the underlying variables.

e. All statements are TRUE.

8. Which of the following statements is TRUE about econometric theory?

a. Econometric theory specifies the list of explanatory variables on the right side of an equation explaining an economic (phenomenon) relationship.

b. Econometric theory uses data collected by statisticians to test the empirical validity of economic theory

c. Econometric theory describesan economic relationship in mathematical form and cannot explain the underlying relationship is estimated.

d. Econometric theory is primarily concerned with empirical verification or refutation of the relationship constructed by economic theory.

e. All statements are TRUE

f. b and d statements are TRUE

9. Which of the following statements is TRUE regarding the basic assumptions of the regression modelY_t=α+βX_t+u_t?

a. E(u_tu_t-j) should be equal to a zero value over time for serial correlation (or autocorrelation) to exist in the model.

b. E(u_t)² should be equal to a constant value over time for the errors to be homoscedastic.

c. u_t ˜ N(0, σ²)

d. All statements are TRUE

e. b and c statements are TRUE

You are given the national income equilibrium consisting of the following equations:Y=Y=C+I+G

C=100+0.80Y_d
I ¯ =30
G ¯=20
Y_d≡Y-T
T=10

10. Which of the following statements is FALSE regarding the above model?

a. C=100+0.80Y_d is a behavioral equation.

b. Y_d≡Y-T is an equilibrium condition

c. I ¯ and G ¯ are exogenous variables

d. All of the above statements are correct

e. b and c FALSE

11. Which of the following statements is TRUE about the above model?

a. C and Y are endogenous variables

b. Y_d≡Y-T is a definitional equation

c. Y=C+I+G is a behavioral equation

d. All of the above statements are TRUE

e. a and b statements are TRUE

12. The equilibrium level of national income (Y) is equal to

a. 710

b. 660

c. 560

d. 700

13. The equilibrium level of consumption (c) is equal to

a. 710

b. 660

c. 560

d. 700

14. What is the disposable income (Yd)?

a. 710

b. 660

c. 560

d. 700

15. Regression analysis was employed to test whether the return on CAT's stock is determined by the return on the S&P 500 market index. Using ordinary least squares method and monthly data over the period 1993:12-1999:04, the following equation was estimated:

r^CAT = 0.0015 + 1.143 r^S&P500

Based on the estimated CAPM equation, if the return on the market were to increase by 10% the rate of return on CAT's stock would
increase by 0.15%
increase by 11.43%
decrease by 11.43%
decrease by 0.15%

Given the OLS estimates of the CAPM stochastic regression model, UTX^R = α + βS&P500^R + u, UTX^R is the monthly return on United Technologies Corporation (UTX) stock, S&P500^R is the monthly return on the S&P500 market index and u is the error term:

Dependent Variable: RUTX
Method: Least Squares
Date: 11/05/16 Time: 11:59
Sample (adjusted): 1993M12 1999M03
Included observations: 64 after adjustments
Variable	Coefficient	Std. Error	t-Statistic	Prob.
C	0.006564	0.005665	1.158552	0.2511
RINDEX	1.231945	0.122017	10.09653	0.0000
R-squared	0.621813	Mean dependent var		0.028365
Adjusted R-squared	0.615713	S.D. dependent var		0.067595
S.E. of regression	0.041903	Akaike info criterion		-3.476173
Sum squared resid	0.108863	Schwarz criterion		-3.408708
Log likelihood	113.2375	Hannan-Quinn criter.		-3.449595
F-statistic	101.9399	Durbin-Watson stat		2.018383
Prob(F-statistic)	0.000000

16. If the monthly return on the market index increases by 10%, the monthly return on UTX stock will increase by __________

a. 11.59%

b. 12.32%

c. 12.20%

d. 0.65%

17. The UTX stock is __________over the period under study.

a. not volatile

b. passive

c. aggressive

d. volatile

e. c and d

18. The t-statistic for the beta coefficient is equal to ______________.

a. 10.097

b. 1.159

c. 217.47

d. 0.054

19. The UTX stock offers an excess return which is equal to _______________.

a. 0.007

b. 1.232

c. 0.622

d. -0.007

20. The null hypothesis that there is no relationship between the return on UTX stock and the return on the market index (β=0) is _____________ because the absolute value of the t-statistic is ____________.

a. accepted; greater than 2

b. rejected; greater than 2

c. rejected; smaller than 2

d. accepted; smaller than 2

e. none of the above.

Reference no: EM131880086

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