Assignment

1. Define econometrics, economic model, and econometric model. What are some goals of econometric
analysis?

2. What are the main types of economic data in econometrics? Give examples for each type of economic
data.

3. Does a regression imply that there is a causal relationship or correlation between the dependent and
independent variables? Give examples.

4. Define regression model, estimated equation, and residuals.

5. What method is used to obtain the coefficients?

6. How is R-squared defined and what does it measure?

7. By taking logs of the variable, how does the interpretation of coefficients change?

8. Which assumptions are needed for the unbiasedness of the coefficients?

9. Which assumptions are needed to calculate the variance of the OLS coefficients?

10. Explain the goodness of fit measures R-squared and adjusted R-squared.

11. Define perfect collinearity and multicollinearity. What test is used to detect multicollinearity? What
is done to prevent these problems?

12. Explain omitted variable bias. If a variable is omitted, are the coefficients biased? What happens to
the variance of the coefficients?

13. List and explain the 6 Gauss Markov assumptions.

14. Which assumptions are needed for the unbiasedness of the coefficients?

16. Define heteroscedasticity. When heteroscedasticity is present, are the coefficients biased? Is the
variance for the coefficients correct? Are the t-tests and F-tests valid?

Deadline: January 31, 2024