1. 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. 

2. Nonexperimental data is called _____.

a. cross-sectional data

b. time series data

c. observational data

d. panel data

3. 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.

 

4. An empirical analysis relies on _____to test a theory.

a. common sense

b. ethical considerations

c. data

d. customs and conventions

 

5. The term ‘u’ in an econometric model is usually referred to as the _____.

a. error term

b. parameter

c. hypothesis

d. dependent variable

6. 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

7. 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

8. 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

 

9. 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 

10. 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