The following 3 questions all refer to the population regression model and/or th
ID: 3042350 • Letter: T
Question
The following 3 questions all refer to the population regression model and/or the sample regression model from a bivariate regression model where the population regression model is:
and the sample regression model is:
YI = + ui (u is with a hat)
3) Which of the following statements are accurate about the population regression model?
(a) is the stochastic component of Yi.
(b) is the systematic component of Yi.
(c) Both (a) and (b) are correct.
(d) Neither (a) nor (b) are correct.
4) Which of the following statements are accurate?
(a) (u has a hat) is an estimate of ui
(b) Xi is assumed to be measured without error.
(c) Both (a) and (b) are correct.
(d) Neither (a) nor (b) are correct.
5) Which of the statements are accurate?
(a) By specifying a bivariate regression model we are assuming that the impact of a one unit increase in Xi will always be ? regardless of the value of Xi.
(b) By specifying a bivariate regression model we are assuming that there are no other variables that cause Yi and are related to Xi.
(c) Both (a) and (b) are correct.
(d) Neither (a) nor (b) are correct.
Explanation / Answer
3)Yi is a stochastic ( that is random ) component so correct choice is (a)
4) (b) is correct.
From the assumptions the independent variable is fixed so that we can assume that X is measured without error.
We can not able to estimate error term so statement (a) is not correct.
5) Both (a) and (b) are correct.
If the unit change in the independent variable(X) then the change in dependent variable(Y) is same as the coefficient of X
In simple linear regression model we assume that there is linear relationship between Y and X only.