Examine whether the following statements are true or false (1) Serial correlatio

Question

Examine whether the following statements are true or false (1) Serial correlation in the errors u leads to biased estimates of the regression and their tatndard errors when the regression equation Y a + bx tu is estimated by ordinary least (2) The Durbin-Watson test for serial correaltion is applicable only if the regression errors follow a (3) Ordinary Least Square technique when applied to economic time-series data usally yield (4) Least squares techniques when applied to cross-sectional data usally yield biased estimates (5) The Durbin-Watson test can be used to describe whether the errors in a regression equation squares. first order-autoregressive process. unbiased but inefficient estimates because many economic time series are autocorrelated. because many economic time series are heteroscedastic. based on time-series data are serially idendependent.

Explanation / Answer

I. False they are still unbiased.

2 True because it is applicable only at lag 1

3.True.Ols leds to unbiased but inefficient estimates. Follows from first itself

4 false. Old remains unbiased

5 True because when d=2 there is no autocorrelation and errors are serially independent

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