Deck 1: The Nature of Econometrics and Economic Data

Question 1

Which of the following is a difference between panel and pooled cross-sectional data?

A)A panel data set consists of data on different cross-sectional units over a given period of time while a pooled data set consists of data on the same cross-sectional units over a given period of time.
B)A panel data set consists of data on the same cross-sectional units over a given period of time while a pooled data set consists of data on different cross-sectional units over a given period of time
C)A panel data consists of data on a single variable measured at a given point in time while a pooled data set consists of data on the same cross-sectional units over a given period of time.
D)A panel data set consists of data on a single variable measured at a given point in time while a pooled data set consists of data on more than one variable at a given point in time.

Answer 1

B

Question 2

A data set that consists of a sample of individuals, households, firms, cities, states, countries, or a variety of other units, taken at a given point in time, is called a(n) _____.

A)cross-sectional data set
B)longitudinal data set
C)time series data set
D)experimental data set

Answer 2

A

Question 3

A data set that consists of observations on a variable or several variables over time is called a _____ data set.

A)binary
B)cross-sectional
C)time series
D)experimental

Answer 3

C

Question 4

​Experimental data are easy to obtain in the social sciences.

Question 5

Which of the following terms measures the association between two variables?

A)Casual effect
B)​Independence
C)​Average
D)​Correlation

Question 6

_____ has a causal effect on _____.

A)Income; unemployment
B)Height; health
C)Income; consumption
D)Age; wage

Question 7

Nonexperimental data is called _____.​

A)​cross-sectional data
B)​observational data
C)​time series data
D)​panel data

Question 8

The parameters of an econometric model _____.

A)include all unobserved factors affecting the variable being studied
B)describe the strength of the relationship between the variable under study and the factors affecting it
C)refer to the explanatory variables included in the model
D)refer to the predictions that can be made using the model

Question 9

Which of the following is an example of time series data?

A)Data on the unemployment rates in different parts of a country during a year.
B)Data on the consumption of wheat by 200 households during a year.
C)Data on the gross domestic product of a country over a period of 10 years.
D)Data on the number of vacancies in various departments of an organization on a particular month.

Question 10

Which of the following is true?

A)A variable has a causal effect on another variable if both variables increase or decrease simultaneously.
B)The notion of 'ceteris paribus' plays an important role in causal analysis.
C)Difficulty in inferring causality disappears when studying data at fairly high levels of aggregation.
D)The problem of inferring causality arises if experimental data is used for analysis.

Question 11

Data on the income of law graduates collected at different times during the same year is _____.

A)panel data
B)experimental data
C)time series data
D)cross-sectional data

Question 12

Experimental data are sometimes called retrospective data.

Question 13

Which of the following refers to panel data?

A)Data on the unemployment rate in a country over a 5-year period
B)Data on the birth rate, death rate and population growth rate in developing countries over a 10-year period.
C)Data on the income of 5 members of a family on a particular year.
D)Data on the price of a company's share during a year.

Question 14

​Which of the following is true of time series data?

A)​The time series data is easier to analyze than cross-sectional data.
B)​The time series data are independent across time.
C)​The chronological ordering of observations in a time series conveys potentially important information.
D)​A time series data set consists of observations on a variable or several variables at a given time.

Question 15

Which of the following is true of experimental data?

A)Experimental data are collected in laboratory environments in the natural sciences.
B)Experimental data cannot be collected in a controlled environment.
C)Experimental data is sometimes called observational data.
D)Experimental data is sometimes called retrospective data.

Question 16

Econometrics is the branch of economics that _____.​

A)​studies the behavior of individual economic agents in making economic decisions
B)​develops and uses statistical methods for estimating economic relationships
C)​deals with the performance, structure, behavior, and decision-making of an economy as a whole
D)​applies mathematical methods to represent economic theories and solve economic problems

Question 17

The constants of econometric models are referred to as _____.​

A)​parameters
B)​statistics
C)​error terms
D)​hypotheses

Question 18

The term 'u' in an econometric model is usually referred to as the _____.

A)error term
B)parameter
C)hypothesis
D)dependent variable

Question 19

An empirical analysis relies on _____ to test a theory.

A)common sense
B)ethical considerations
C)data
D)customs and conventions

Question 20

Which of the following is the first step in empirical economic analysis?

A)Collection of data
B)Statement of hypotheses
C)Specification of an econometric model
D)Testing of hypotheses

Question 21

Why do labor economists often find it difficult to estimate the ceteris paribus return to education, in terms of wage, using non-experimental data?

A)Education level in non-experimental data is probably dependent on other omitted factors that also affect wage.
B)In a non-experimental setting, education level is often difficult to measure.
C)Wage is often reported unreliably and inaccurately.
D)Experience, another factor that also affects wage, is generally difficult to measure.

Question 22

A cross-sectional data set consists of observations on a variable or several variables over time.

Question 23

​Random sampling complicates the analysis of cross-sectional data.

Question 24

An economic model consists of mathematical equations that describe various relationships between economic variables.

Question 25

In the following econometric model, wage = β₀+ β₁educ + u , which of the following factors would not be contained in the term u ?

A)Experience (exper)
B)Family background (fback)
C)Innate ability (abil)
D)Education (educ)

Question 26

A time series data is also called a longitudinal data set.

Question 27

Given the following econometric model, wage = β₀+ β₁educ + u, can we eliminate the error term u entirely?

A)Yes, by including other observable factors, such as experience, that can also influence wage.​
B)Yes, by ensuring that everyone reports wage accurately and truthfully.
C)No, because education is not always reported accurately.
D)No, because many factors affect wage, that we cannot even list, let alone observe.

Question 28

The notion of ceteris paribus means "other factors being equal."​