Ch1 Full Test Bank The Quest For Causality

Real Econometrics - Chapter 1

True and False Questions:

1. True or False: The dependent variable is the outcome of interest.
2. True or False: X1 is the slope coefficient in the following model Y_i = B₀ + B₁X_1i + e_i.
3. True or False: Y_i=B₀+10X_1i+e_i, a 10 unit increase in X1 is expected to lead to a 1 unit increase in Y.
4. True or False: An independent variable is endogenous if changes in it are related to factors in the error term.
5. True or False: In randomized experiments we determine the value of the dependent variable via a random process.

Multiple Choice Questions:

1. What is the goal of a randomized experiment?
   1. To create exogeneity.
   2. To create endogeneity.
   3. To deal with problems of external validity.
   4. To increase sample size.
2. Which of the following are fundamental challenges when trying to infer relationships from data?
   1. Exogeneity
   2. Endogeneity
   3. Correlation
   4. Math
3. An independent variable is endogenous if:
   1. It is correlated with another independent variable in the model.
   2. It is correlated with the error term.
   3. It is not correlated with the error term.
   4. If it is correlated with Y.
4. Assume that we are looking at the effect of education on wages, which of the following factors could most likely lead to endogeneity?
   1. Height
   2. Religion
   3. Number of siblings
   4. Intelligence
5. Assume that we trying to explain infant mortality as a function of GDP per capita in a sample of countries from around the world. Which of the following factors could most likely lead to endogeneity?
   1. Whether the country has been at war
   2. Population size
   3. (Geographic) size of country
   4. Use of proportional representation system
6. Given Income_i = 10 + 1.5Age_i + e_i, interpret the model
   1. A one year increase in age is expected to lead to a 1.5 increase in income
   2. A 1.5 increase in age is expected to lead to a 1 increase in income
   3. A 1.5 increase in income is expected to lead to a 1 unit increase in age
   4. Income is 10
7. Given GPA_i=1.0+0.001SAT_i+e_i what is the expected GPA of someone with an SAT score of 2000
   1. 1.0
   2. 1.001
   3. 2000
   4. 3.0
8. When an independent variable is exogenous
   1. It is correlated with the error term
   2. It is not correlated with the error term
   3. It is correlated with the slope
   4. It is not correlated with the slope
9. Suppose we are trying to understand the effect of maternal smoking on the birthweight of newborn babies. Which of the following is not a likely source of endogeneity?
   1. Mother’s health consciousness
   2. Tax rates on cigarettes
   3. Mother’s education
   4. Father’s smoking habits
10. The error term
    1. Contains all other factors that affect the dependent variable.
    2. Contains all other factors that affect the independent variable.
    3. Contains all other factors that affect the intercept.
    4. Is a random variable with no relation to other variables.
11. List and explain the three fundamental challenges in statistics.
12. Describe the basic process behind an experiment.
13. What is internal and external validity?
14. Imagine that you are looking at the relationship between income and level of education, list some of the factors that could lead to endogeneity.
15. Imagine that you are looking at the relationship between political affiliation and religion, list some of the factors that could lead to endogeneity.

Real Stats – Chapter 2

True or False Questions:

1. True or False: The standard deviation measures how widely dispersed the values of the observations are.
2. True or False: If an analysis cannot be replicated, it cannot be trusted.
3. True or False: Replication files are used by researches to verify another researcher’s projects results.
4. True or False: Statistical projects should document both the data and the methods used to arrive at the conclusion.
5. True or False: The statistical package R is easier to use than Stata.
6. Please list the descriptive statistics that are used to better understand the data.
7. Explain the importance of keeping replication files and properly documenting the data/research.
8. Describe/list some of the information that generally goes into a codebook.
9. What is the purpose of plotting the data?
10. Compare and contrasts the basic benefits/drawbacks of Stata and R.