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ECO453

Question: Which is fixed effect model? Answer: [A] y = (î± + Ä\i\) + Xit î2 + Vit

Question: What is the probability of Mariam not working if the probability of her working is 0.67?
Answer:  0.33

Question: Perform diagnostic check in ARDL for serial correlation using the Breusch- Godfrey LM test, select “Viewâ€D then
select “‭	‬â€D and “Serial
Correlation LM Testâ€D
Answer:  Residual Panel

Question: A one-way model includes only one set of	variables
Answer:  dummy

Question: Random effects assume that the entity’s error term is not correlated with the predictors which allows for time-invariant
variables to play a role as	
variables.
Answer:  explanatory

Question: A fixed effect model examines if
	vary across group or time
period,
Answer:  intercepts

 Question: When using fixed effect we assume that something within the individual may impact or bias the predictor or outcome
variables and we need to	for
this.
Answer:  control

 Question: When each entity in a data set has different numbers of observations, the panel data are	.
Answer:  not balanced

Question: A random effect model explores
differences in error	
components across individual or time period.
Answer:  variance

Question: Which model is random effect? 
Answer:  y = î± + Xit î2 +( Âpi + Vit)

Question: Technically, time-invariant characteristics of the individuals are
perfectly	with the person [or
entity] dummies.
Answer:  collinear

Question: Since an individual specific effect
is time invariant and considered a part of the
intercept, Âp is allowed to be correlated with
other regressors; That is, OLS assumption
is not violated.
Answer:  2


 

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