Choose any four of the following six statements and explain whether the statement is true, false...

 

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Choose any four of the following six statements and explain whether the statement is true, false or uncertain. Be sure to fully explain your answers fully and justify the choice you make, because it is the explanation rather than the choice you make that matters most for the mark. (Each question is worth 5 marks) (a) If we have modelled the trend adequately in time series regressions, we can just look at the value of R² as a reliable guide to whether the model is a good model. (b) Let Ct denote consumption expenditure and Yt denote disposable income. To estimate consumption function over time, we can simply run the following model: C₁ =a +BY+B₂Y + BAY +E, where AY, =Y, - Y, (c) If GDP and number of iPhones sold are both trending upwards, a regression of GDP on the number of iPhones sold would get a very good model with a large R². Thus, if someone was to ask how we could stimulate economic growth, we can claim the best answer is to sell more iPhones. (d) People with higher "ability" tend to get more schooling, but you run the following regression model instead: Earnings = a + p*Years of Schooling + ε. The OLS estimator of ß is biased. (e) The estimates of the effect of annual advertising expenditure (ADV), on annual sales revenue (SALES) in millions of dollars is given by: SALES, = 25.34 +1.84 ADV, +3.80 ADV +2.27 ADV₁ The cumulative impact of increase advertising expenditure by one (thousand $) on sales is $7.9 millions (f) You are hired as a quantitative analyst to the NZ Ministry of Social Development (MSD). The MSD recently implements a training program for the unemployed and you are asked to evaluate the impact of the program on earning of program participants. You have been given a data set containing the earnings of a random sample of workers, in which some received training and some did not. You manager told you that to get a true impact of the program, we can simply compare mean income of workers with training and mean income of workers without training. Choose any four of the following six statements and explain whether the statement is true, false or uncertain. Be sure to fully explain your answers fully and justify the choice you make, because it is the explanation rather than the choice you make that matters most for the mark. (Each question is worth 5 marks) (a) If we have modelled the trend adequately in time series regressions, we can just look at the value of R² as a reliable guide to whether the model is a good model. (b) Let Ct denote consumption expenditure and Yt denote disposable income. To estimate consumption function over time, we can simply run the following model: C₁ =a +BY+B₂Y + BAY +E, where AY, =Y, - Y, (c) If GDP and number of iPhones sold are both trending upwards, a regression of GDP on the number of iPhones sold would get a very good model with a large R². Thus, if someone was to ask how we could stimulate economic growth, we can claim the best answer is to sell more iPhones. (d) People with higher "ability" tend to get more schooling, but you run the following regression model instead: Earnings = a + p*Years of Schooling + ε. The OLS estimator of ß is biased. (e) The estimates of the effect of annual advertising expenditure (ADV), on annual sales revenue (SALES) in millions of dollars is given by: SALES, = 25.34 +1.84 ADV, +3.80 ADV +2.27 ADV₁ The cumulative impact of increase advertising expenditure by one (thousand $) on sales is $7.9 millions (f) You are hired as a quantitative analyst to the NZ Ministry of Social Development (MSD). The MSD recently implements a training program for the unemployed and you are asked to evaluate the impact of the program on earning of program participants. You have been given a data set containing the earnings of a random sample of workers, in which some received training and some did not. You manager told you that to get a true impact of the program, we can simply compare mean income of workers with training and mean income of workers without training.

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The detailed answer for the above question is provided below a False The value of R coefficient of determination is a measure of the proportion of var... View the full answer