Question

Multiple choice!

Consider the model Yi = B0 + B1X1i + B2X2i + B3X3i + B4X4i + Ui. To test the null hypothseis of B2 = B3 = 0, the restricted regression is:

• A. Yi = B0 + B1X1i + B2X2i + B3X3i + B4X4i + Ui
• B. Yi = B0 + Ui
• C. Yi = B0 + B1X1i + B4X4i + Ui
• D. Yi = B0 + B2X2i + B3X3i + Ui

Consider the model Yi = B0 + B1X1 + B2X2 + B3(X1X2) + Ui. This model assumes that:

• A. X2 is the regressor and X1 is the regressand
• B. the effect of X2 on Y depends on the value of X1
• C. the effect of X2 on Y is constant
• D. there is no possible effect of X2 on Y

Consider the quadratic regression Yi = B0 + B1Xi + B2(Xi-squared) + Ui. If you could not reject a null hypothesis that the slope coefficient B2 is not significant, then:

• A. the polynomial degree will be increased.
• B. the quadratic regression will become a linear regression.
• C. we can claim that B1 is not significant also.
• D. the quadratic regression will become a cubic regression.

Consider the quadratic regression Yi = B0 + B1Xi + B2(Xi-squared) + Ui. The degree of polynomial in this regression is:

• A. 0
• B. 2
• C. 1
• D. 2 squared or (4)

Answer 1

1)Consider the model Yi = B0 + B1X1i + B2X2i + B3X3i + B4X4i + Ui. To test the null hypothseis of B2 = B3 = 0, the restricted regression is:

As B2 and B3 coefficient need to check. only their coefficient need to be included.

D. Yi = B0 + B2X2i + B3X3i + Ui

2)Consider the model Yi = B0 + B1X1 + B2X2 + B3(X1X2) + Ui. This model assumes that:

B. the effect of X2 on Y depends on the value of X1

3)Consider the quadratic regression Yi = B0 + B1Xi + B2(Xi-squared) + Ui. If you could not reject a null hypothesis that the slope coefficient B2 is not significant, then:

B. the quadratic regression will become a linear regression.

4)Consider the quadratic regression Yi = B0 + B1Xi + B2(Xi-squared) + Ui. The degree of polynomial in this regression is:

B. 2

Please revert in case of any doubt.

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