can you please explain 8 and 10 An econometrician uses changes in minimum wage l

Question

can you please explain 8 and 10

An econometrician uses changes in minimum wage laws to determine the effects of minimum wage on the number of the workers hired. She surveys 100 businesses before the policy change and then contacts each business again after the policy change. Which type of data does she have? A. Cross-sectional B. Time-series C. Cross-sectional, time-series D. Panel Which of the following will increase the precision of our estimators b_1 and b_2? A. An increase in the variance of u B. An increase in the sample size C. A decrease in the variation in X D. A decrease in the covariance between X and Y Given 62 observations, a true population parameter variance of 4.57, and a parameter estimate of 8.23, test whether the true population parameter is 12 at the 5% level. A. With a critical value of -1.96, we fail to reject this null. B. With a critical value of -1.645, we fail to reject this null. C. With a critical value of -1.671, we reject this null. D. With a critical value of -1.671, we reject this null. D. With a critical value of -2,000, we fail to reject this null. Which of the following statements is true about R^2? A. A high R^2 means you have estimated the correct model. B. Since ESS and TSS are both squared terms, R^2 lessthanorequalto 0. C. Since ESS lessthanorequalto TSS, we know that ESS/TSS lessthanorequalto 1 and so R^2 lessthanorequalto 1. D. If R^2 is low, your estimated coefficients must be not significantly different from 0. Which of the following is not a correct OLS assumption? A. The model is linear in variables and correctly specified B. Sigma^n_i=1 (X_i - X bar)^2 notequalto 0 C. E(u_i) = 0 D. The disturbance term is homoskedastic E. The values of the disturbance term have independent distributions F. The disturbance terms come from a normal distribution

Explanation / Answer

8. At 5% level means z value is -1.96

If we observe Z table for 95% confidence level it is +1.96

From that we can say option A is right

10

From the below 7 points we can say all the above given points satisfy except 1.

If we oberve the first point correctly specified it is asymptotic behavior of OLS

The classical model focuses on the "finite sample" estimation and inference, meaning that the number of observations n is fixed. This contrasts with the other approaches, which study the asymptotic behavior of OLS, and in which the number of observations is allowed to grow to infinity.

In some applications, especially with cross-sectional data, an additional assumption is imposed — that all observations are independent and identically distributed. This means that all observations are taken from a random sample which makes all the assumptions listed earlier simpler and easier to interpret. Also this framework allows one to state asymptotic results (as the sample size n), which are understood as a theoretical possibility of fetching new independent observations from the data generating process. The list of assumptions in this case is:

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