Econometrics

Test your knowledge with these Econometrics MCQs with Answers, covering autocorrelation, heteroscedasticity, multicollinearity, and OLS assumptions. The Econometrics Quiz is perfect for students, researchers, econometricians, and data scientists. Let us try Econometrics MCQs with Answers Quiz now.

Online Econometrics MCQss with Answers

1. The term heteroscedasticity refers to

 The variance of the errors is not constant

 The errors have non-zero mean

 The variance of the dependent variable is not constant

 The errors are not linearly independent of each other

2. Multicollinearity causes

 Insignificant t-ratios

 Biased Coefficient estimates

 None of these

 Low R-squares

3. Collinearity or multicollinearity occurs whenever

 There is a close linear relationship among the explanatory variables

 There is a close, non-linear relationship among the independent variables

 The dependent variable is highly correlated with the independent variables

 The explanatory variables are highly orthogonal

4. In case of homoscedasticity

 $E(u_i^2) = 0$

 $E(u_i^2 ) = n \times p$

 $E(u_i^2 ) ≠ \sigma^2 = Var(u_i^2)$

 $E(u_i^2 ) = \sigma^2 = Var(u_i^2)$

5. Heteroscedasticity is more common in

 Panel Data

 Time-series data than cross-sectional data

 Meta Data

 Cross-sectional data rather than time series data

6. If a Durbin-Watson statistic takes a value close to zero, what will be the value of the first-order autocorrelation coefficient?

 Close to –1

 Close to 1

 Lies between –1 and +1

 Close to zero

7. The value of $d$ lies between

 0 and 4

 0 and $\infty$

 0 and 2

 –4 and 4

8. If the value of R-squared between $X_2$ and $X_3$ approaches to 1 then

 VIF becomes zero

 There is no effect on VIF

 VIF approaches to infinity

 VIF approaches to zero

9. Autocorrelation may occur due to

 Inertia

 Omitted variable specification bias

 Effect of Cobweb Phenomenon

 All options

10. What does a VIF of 1 mean?

 Not at all

 There is near or high multicollinearity

 There will be no multicollinearity

 There is perfect multicollinearity

11. A system which have an infinite number of solutions has

 Less variables than equations

 Equal number of variables and equations

 None of these

 More variables than equations

12. In the presence of autocorrelation, the OLS estimates are no longer

 Efficient

 All of these

 Consistent

 Unbiased

13. The AR(1) process is stationary if

 $r = 1$

 $r = 0$

 $|r| > 1$

 $|r| < 1$

14. If we omit a relevant variable from the model

 Heteroscedasticity

 The disturbance variance $\sigma^2$ is correctly estimated

 The disturbance variance $\sigma^2$ is incorrectly estimated

 Autocorrelation

15. If $d*<d_l$ then we

 Problem of collinearity

 Problem of Heteroscedasticity

 Reject $H_0$ of no autocorrelation

 Accept $H_0$ of no autocorrelation

16. Zero tolerance value indicates

 Near to Perfect multicollinearity

 No multicollinearity

 Perfect multicollinearity

 Low multicollinearity

17. If the calculated value of tolerance is 1, then there is an issue of

 Low multicollinearity

 No multicollinearity

 None of these

 Perfect multicollinearity

18. When measurement errors are present in the explanatory variable(s), they make

 Consistent estimation of parameters high

 Consistent estimation of parameters complex

 Consistent estimation of model parameters low

 Consistent estimation of parameters impossible

19. An assumption underlying the $d$ statistics is that “The explanatory variables $X$’s are non-stochastic or fixed in —————-“.

 Simple random sampling

 None of the these

 Cluster sampling

 Repeated sampling

20. Heteroscedasticity may —————– the variance and standard errors of the OLS estimates.

 Minor affect

 Not affect

 Highly affect

 Affect

 Loading …

Question 1 of 20

Online Econometrics MCQs with Answers

• An assumption underlying the $d$ statistics is that “The explanatory variables $X$’s are non-stochastic or fixed in —————-“.
• The term heteroscedasticity refers to
• Zero tolerance value indicates
• A system which have an infinite number of solutions has
• If we omit a relevant variable from the model
• When measurement errors are present in the explanatory variable(s), they make
• If $d*<d_l$ then we
• If a Durbin-Watson statistic takes a value close to zero, what will be the value of the first-order autocorrelation coefficient?
• Heteroscedasticity is more common in
• Autocorrelation may occur due to
• The AR(1) process is stationary if
• Heteroscedasticity may —————– the variance and standard errors of the OLS estimates.
• The value of $d$ lies between
• In case of homoscedasticity
• In the presence of autocorrelation, the OLS estimates are no longer
• What does a VIF of 1 mean?
• Multicollinearity causes
• If the calculated value of tolerance is 1, then there is an issue of
• If the value of R-squared between $X_2$ and $X_3$ approaches to 1 then
• Collinearity or multicollinearity occurs whenever

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The Post is about Online MCQs Econometrics. The MCQS Econometrics Quiz contains 20 multiple-choice questions on heteroscedasticity, multicollinearity, auxiliary regression, multiple regression, autocorrelation, and regression diagnostics. Let us start with the Online MCQs Econometrics quiz.

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Online MCQs Econometrics with Answers

• In a regression model with three explanatory variables, there will be ————– auxiliary regressions
• The AR(1) process is stationary if
• The value of Durbin Watson $d$ lies between
• Which of the following actions does not make sense to struggle against multicollinearity?
• Autocorrelation may occur due to
• Which of the following can indicate negative autocorrelation?
• Which one is not the rule of thumb?
• Heteroscedasticity can be detected by plotting the estimated $\hat{u}_i^2$ against
• If a Durbin Watson statistic takes a value close to zero what will be the value of the first-order autocorrelation coefficient?
• Which of the following statements is true about autocorrelation?
• When measurement errors are present in the explanatory variable(s) they make
• Heteroscedasticity is more common in
• Which one assumption is not related to error in explanatory variables?
• For the presence and absence of first-order autocorrelation valid tests are
• Choose a true statement about the Durbin-Watson test
• What technique models a categorical variable based on one or more independent variables?
• What is a nonlinear function that connects or links a dependent variable to the independent variables mathematically?
• What type of regression models a categorical variable based on one or more independent variables?
• In a linear regression model, what is the area surrounding the regression line that describes the uncertainty around the predicted outcome at every value of X?
• The ————- states that no two independent variables ($X_i$ and $X_j$) can be highly correlated with each other.

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