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12. We consider the following regressions: has a bias if (A) z2 is significantly

ID: 3334887 • Letter: 1

Question

12. We consider the following regressions: has a bias if (A) z2 is significantly correlated with zi but not significantly correlated with y (B) 32 is not significantly correlated with a and not significantly correlated with y (C) 72 is not significantly correlated with z but significantly correlated with y (D) T2 is significantly correlated with ziy and significantly correlated with y 13. The higher R2 (A) the less the regression line fits the data (B) the more the regression explains the variation of the independent variable (C) the more the regression explains the variation of the dependent variable (D) the higher the OLS estimates (, ,. . . ). 14. We consider the following regressions: (II) y=70+11x1 +72x2+u 15. There is an omitted variable bias in regression (I) if (A)-2 is correlated with y (B) T2 is correlated with i (C) a2 is correlated with a and u (D) c2 is correlated with x, and y 16. We consider the following regressions: If T2 is uncorrelated with both y and ai, then (D) It depends on the sample

Explanation / Answer

I think you are asking for Q13' answer.

q13)

The right answer is option C.

The R^2 given the amount of variance the dependent variable the independent variable explains.

Thus is Rsquare goes higher, the more variance of dependent variable is explained.