5c 1.

HETEROSKEDASTICITY 

When the variance of error of a variable being monitored on an independent variable is not constant,
HETEROSKEDASTICITY arises.In HETEROSKEDASTICITY, the data set is dispersed, and the
errors are similarly dispersed.
HETERO :- Changing 
SKEDASTICITY :- Variance 

Symptoms of the HETEROSKEDASTICITY are :- 

1. Low R square
2. Systematic pattern to errors
3. Visually the Linear regression model looks like Funnel

How to remove the presence of heteroskedasticity from data

1. Linearize the entire data
2. Drop the Outliers
3. Cluster analysis
4. Using Double log Model to Linearize the data

MULTI-COLLINEARITY
When there are more than one independent variable and one of the independent variables is associated
with the other independent variables, multicollinearity arises.
As a result, the analysis becomes inefficient since we are unable to grasp the influence of one variable
on the dependent variable when it is considered apart from the other factors.

Multicollinearity in data can be determined by the following ways-

1. Check the correlation between independent variables. If the correlation value for any 2 of
them is greater than 0.6, it is said that they are highly correlated. 
2. In some cases, 2 variables might show low correlation but 3 of them together show multi-
collinearity.
3. R square might be a great fit in some cases but individual variables might be insignificant, i.e.
the |computed t-stat| < |critical t-stat|. 
4. Coefficients also might have signs opposite to what you might expect from the rea world or
from theory. 

5c 2.
Microeconomics :- Microeconomics deals with the study of the household, individuals and allocating
resources. It includes markets of goods and services which deals in economic issues. Whereas
Macroeconomics is study of behaviour and performance of the economy of total , the factors which
are associated with macroeconomics are unemployment, GDP, inflation and growth rate of the
economy etc.
Microeconomics area of the study is particular market segment of the economy on the other side
macroeconomics cover the entire economy and cater multiple market segment.
Areas in which microeconomics deals in is factor pricing , product pricing , consumption, , economic
welfare and etc and microeconomics deals in national income , employment, money, national income,
distribution etc.
The scope of microeconomies covers economic welfare , production and consumption , whereas scope
of macroeconomies deals in general price level , national income and more.
Limitation of microeconomies is it is based on impractical presuppositions and in macroeconomies
sometimes misconception of composition fails to prove accurate.