QUESTION 28 When two or more explanatory variables are highly correlated, the co
ID: 1174265 • Letter: Q
Question
QUESTION 28
When two or more explanatory variables are highly correlated, the condition is known as
serial correlation
multiple correlation
spurious correlation
multicollinearity
QUESTION 29
When a multiple regression equation is estimated, the F-test indicates
how many variables were statistically significant
how many variables were not statistically significant
if the estimated equation was statistically significant
if the intercept was statistically significant
QUESTION 30
Suppose a demand equation was estimated using the Regression technique. The explanatory variables included in the equation were price of own good, price of substitute good, income of consumers and expected future price. What test will be used to test if each of the explanatory variables were statistically significant?
the F-test
the correlation test
the t-test
the multicollinearity test
QUESTION 31
Which of the following is an example of Lagging Economic Indicator
taxes not paid
high accumulation of credit card debt
increased filing of bankruptcy
all of the above
QUESTION 32
Compared to competition, a monopolist
produces more and charges a higher price
produces less and charges a lower price
produces less and charges a higher price
may produce more and may charge a higher price
QUESTION 33
Most public utilities in our economy enjoy a good degree of monopoly because of
government regulation
decreasing returns to scale
increasing returns to scale
constant returns to scale
serial correlation
multiple correlation
spurious correlation
multicollinearity
Explanation / Answer
Q28) option d - multicollinearity, option a is wrong bcoz correlation among successive error terms is autocorrelation
Q29)option c , F test is used for the joint significance of all the explanatory variables, thus gives significance of the overall regression analysis.
Q30) option c) t test
Q31) option d
Lagging indicators are typically “output” oriented, easy to measure but hard to improve or influence
Q32)option c
Q33( option c, bcoz of IRS, AC falls as level of production rises, & so advantageous when only one firm exists, like railways
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