UNIVERSITY OF CALICUT

SCHOOL OF DISTANCE EDUCATION

VI Semester
B.A. ECONOMICS
MCQ- Elective Paper
BASIC ECONOMETRICS

1. Who is the father of econometrics?

a. Ragnar Frisch
b. Adam smith
c. Keynes
d. Alfred marshal
2. What is the meaning of the term "heteroscedasticity"?
a.The variance of the errors is not constant
b.The variance of the dependent variable is not constant
c.The errors are not linearly independent of one another
d.The errors have non- zero mean
3. What would be then consequences for the OLS estimator if heteroscedasticity is
present in a regression model but ignored?
a. It will be ignored
b. It will be inconsistent
c. It will be inefficient
d. All of the above
4. What will be the properties of the OLS estimator in the presence of multicollinearity?
a.It will be consistent unbiased and efficient
b.It will be consistent and unbiased but not efficient
c.It will be consistent but not unbiased
d.It will not be consistent
5. A sure way of removing multicollinearity from the model is to
a.Work with panel data
b.Drop variables that cause multicollinearity in the first place
c.Transform the variables by first differencing them
d.Obtaining additional sample data
6. Autocorrelation is generally occurred in
a. Cross-section data
b. Time series data
c. Pooled data
d. None of the above
7. The regression coefficient estimated in the presence of autocorrelation in the sample
data are NOT
a.Unbiased estimators
b.Consistent estimators
c.Efficient estimators
d.Linear estimators
8. In the regression function y=α + βx +c
a.x is the regressor
b.Y is the regressor
c.x is the regressand
d.none of these
9. The coefficient of determination, r2 shows
a. Proportion of the variation in the dependent variable Y is explained by the
independent variable X
b. Proportion of the variation in the dependent variable X is explained by the
independent variable Y
c. Proportion of the variation in ui is explained by the independent variable X
d. Both a and c
10. Data on one or variables collected at a given point of time
a. Panel Data
b. Time series data
c. Pooled data
d. Cross-section data
11. The violation of the assumption of constant variance of the residual is known as
a.Heteroscedasticity
b.Multicollinearity
c.Homoscedasticity
d.Autocorrelation
12. Formula of coefficient determination is
a. 1+RSS/TSS
 b. 1-RSS/ESS
c. 1-RSS/TSS
d. 1*RSS/TSS
13. When there are both qualitative and quantitative variables are there in the model,
a. ANOVA
b. ANCOVA
c. CHI SQUARE
d. All of the above
14. Durbin Watson test is associated with:
a. Heteroscedasticity
b. Multicollinearity
c. Autocorrelation
d. Both a and c
15. White's test is used for the detection of -----------?
a. multicollinearity
b. hetroscedasticity
c. Autocorrelation
d. None of the above
16. Homogeneity of three or more population correlation coefficients can be tested by
a. F-test
b. t-test
c. Z-test
d. χ2-test
17. Which one is equal to explained variation divided by total variation?
a. Sum of squares due to regression
b. Coefficient of Determination
c. Standard Error of Estimate
d. Coefficient of Correlation
18. Which of the following statements is true about autocorrelation?
a. Consecutive values of Errors term or observations are correlated
b. Regressors are correlated
c. The conditional distribution of error terms is constant
d. Consecutive errors or observations are uncorrelated
19. Choose a true statement about Durbin-Watson test
a. DW≈0 means negative autocorrelation
b. DW-test verifies autocorrelation of any given order auto-regressive model
c. DW-test verifies autocorrelation only of the first order auto-regressive model
d. None of these
20. Negative autocorrelation can be indicated by which of the following?
a. A cyclical pattern in the residuals
b. Complete randomness in the residuals
c. All of the residuals are close to zero
d. All alternating pattern in the residuals
21. Which of the action does not make sense to take in order to struggle against
multicollinearity?
a. Add more regressors in the model
b. Increase more observations
c. Decrease the number of regressors in the model
d. None of these
22. The value of Durbin Watson d lie between
a. −4 and 4
b. 0 and ∞
c. 0 and 4
d. 0 and
23. For the presence and absence of first-order autocorrelation valid tests are
a. Park and Glejser test
b. Durbin-Watson d and Durbin h statistics
c. White and Gold-Feld test
d. All of the above
24. What will be the properties of the OLS estimator in the presence of multicollinearity?
a. It will be consistent unbiased and efficient
b. It will be consistent and unbiased but not efficient
c. It will be consistent but not unbiased
d. It will not be consistent
25. One of the assumption of CLRM is that the number of observations in the sample must
be greater the number of
a. Regressor
b. Regressands
c. Dependent variable
d. Dependent and independent variable
26. If there exist high multicollinearity, then the regression coefficients are
a. Determinate
b. Indeterminate
c. Infinite values
d. Small negative values
27. Multicollinearity is essentially a
a. Sample phenomenon
b. Population phenomenon
c. Both a and b
d. Either a or b
28. A sure way of removing multicollinearity from the model is to
a. Work with panel data
b. Drop variables that cause multicollinearity in the first place
c. Transform the variables by first differencing them
d. Obtaining additional sample data
29. Heteroscedasticity is more likely a problem of
a. Cross-section data
b. Time series data
c. Pooled data
d. All of the above
30. There are several reasons for serial correlation to occur in a sample data. Which of
these is NOT
a. Business cycle
b. Specification bias
c. Manipulation of data
d. Stationary data series
31. The regression coefficient estimated in the presence of autocorrelation in the sample
data are NOT
a. Unbiased estimators
b. Consistent estimators
c. Efficient estimators
d. Linear estimators
32. When supply of a commodity, for example agricultural commodities, react to price
with a lag of one time period due to gestation period in production, such a phenomenon
is referred to as
a. Lag phenomenon
b. Cobweb phenomenon
c. Inertia
d. Business cycle
33. If in our regression model, one of the explanatory variables included is the lagged
value of the dependent variable, then the model is referred to as
a. Best fit model
b. Dynamic model
c. Autoregressive model
d. First-difference form
34. Full form of OLS
a. Ordinary least square method
b. Ordinary least statistical method
c. Ordinary least sample method
d. Both b and c
35. Student ‘t’ test was formulated by
a. William Sealy Gosset
b. Carl Friedrick Gauss
c. Durbin Watson
d. Both b and c
36. BLUE is
a. Best Linear Unbiased Estimator
b. Best Linear Unconditional Estimator
c. Basic Linear Unconditional Estimator
d. Both b and c
37. Information about numerical values of variables from period to period is
a. Time series data
b. Cross-section data
c. Panel data
d. Pooled data
38. Data on one or variables collected at a given point of time
a. Time series data
b. Cross-section data b)Pooled data
c. Panel data
d. Both and b
39. The statistical properties of OLS estimators are
a. Linearity, Unbiasedness, and minimum variance
 b. Linearity and Unbiasedness
c. Unbiasedness, and minimum variance
d. Linearity and minimum variance
40. Method of ordinary least square is attributed to
a. Carl Friedrick Gauss
b. William Sealy Goss
c. Durbin Watson
d. Both b and c
41. What is ui?
a. Errror term
b. Disturbance term
c. Both a and b are correct
d. Both a and b are wrong
42. Homoscedasticity means
a. Constant variance
b. Minimum variance
c. Maximum variance
d. Zero variance
43. The term regression was coined by
a. Francis Galton
b. Karl pearson
c. Carl Friedrick Gauss
d. William Sealy Goss
44. In confidence interval estimation, α = 5%, this means that this interval includes the true
β with probability of
a. 5%
b. 50%
c. 95%
d. 45%
45. Which of the following distributions is used to compare two variances?
a. T – Distribution
b. F – Distribution
c. Normal Distribution
d. Poisson Distribution
46. An empirical analysis relies on _____to test a theory
a. Common sense
b. Ethical considerations
 c. Data
d. Customs and conventions
47. The term ‘u’ in an econometric model is usually referred to as the _____.
a. Error term
b. Parameter
c. Hypothesis
d. Dependent variable
48. 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
49. 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. cross-sectional data set
b. longitudinal data set
c. time series data set
d. experimental data set
50. A data set that consists of observations on a variable or several variables overtime is
called a _____ data set.
a. binary
b. cross-sectional
c. time series
d. experimental
51. A dependent variable is also known as a_____.
a. explanatory variable
b. control variable
c. predictor variable
d. response variable
 ANSWERS
1. A 11.A 21.A 31.C 41.C
2.A 12.C 22.C 32.B 42.A
3.C 13.B 23.B 33.C 43.A
4.A 14.C 24.A 34.A 44.C
5.B 15.B 25.A 35.A 45.B
6.B 16.D 26.A 36.A 46.C
7.C 17.B 27.A 37.A 47.A
8.A 18.A 28.B 38.B 48.B
9.A 19.C 29.A 39.A 49.A
10.D 20.B 30.D 40.A 50.C
51.D

Prepared by:
Dr. Shima. K.M,
Asst. Professor,
SDE, University of Calicut.