3) The t-statistic is calculated by dividing a) the OLS estimator by its standar

Question

3) The t-statistic is calculated by dividing a) the OLS estimator by its standard error b) the slope by the standard deviation of the explanatory variable. c) the estimator minus its hypothesized value by the standard error of the estimator. d) the slope by 1.96. the least squares assumptions (zero cooditional mean for the error term, X and being ii d, and X, and ui having finite fourth moments), the OLS estimator for the slope and intercept a) has an exact normal distribution for n> 15 b) is BLUE c) has a normal distribution even in small samples. d) is unbiased. 5) When there are omitted variables in the regression, which are determinants of the dependent variable, then a) you cannot measure the effect of the omitted variable, but the estimator of your included variable(s) is (are) unaffected b) this has no effect on the estimator of your included variable because the other variable is not inçluded c) this will always bias the OLS estimator of the included variable d) the OLS estimator is biased if the omitted variable is correlated with the included variable. ou have to worry about perfoct multicollinearity in the multiple regression model because a) many economic variables are perfectly correlated. b) the OLS estimator is no longer BLUE c) the OLS estimator cannot be computed in this situation. d) in real life, economic variables change together all the time. The overall regression F-statistic tests the null hypothesis that a) all slope coefficients are zero. b) all slope coefficients and the intercept are zero. e) the intercept in the regression and at least one, but not all, of the slope coeflicients is 7) zero. d) the slope coefficient of the variable of interest iszero, but that the other slope coefficients are not. 8) If the estimates of the coefficients of interest change substantially across specifications, then this can be expected from sample variation. then you should change the scale of the variables to make the changes appear to be smaller a) b) e) then this often provides evidence that the original specification had omitted variable bias. d) then choose the specification for which your coefficient of interest is most significant.

Explanation / Answer

3. The right answer is option c) the estimator minus its hypothesized value by the standard error of the estimator.

Explanation: t-statistic is calculated in the case of small-sample statistics to replace z-statistic. t-statistic is calculated by taking the estimator and then subtracting the hypothesized value of the estimator and then dividing the same by the standard error of the estimator.

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