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Mathematical Economics-Online Practice Exam 7

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# Question

1. The Y intercept in the simple linear regression equation (x is the independent variable and y is the dependent variable) represents the

true value of y when x = 0

expected value of y when x = 0

standard deviation of the values of x

change in average value of y per unit change in x

# Question

2. The slope of the simple linear regression equation (x is the independent variable and y is the dependent variable) represents the

true value of y for a fixed value of x

mean value of y when x = 0

change in mean value of y per unit change in x

variance of the values of x

# Question

3. Which of the following is true with regard to simple regression and correlation analysis ?

Correlation analysis provides a measure, which indicates how well an equation for estimating one variable from another explains the changes in the estimated variable

If the coefficient correlation between two variables is close to 1, then there is no correlation between the two variables

If the slope of a regression equation is positive, then the coefficient of correlation between the variables involved is negative

If the slope of a regression equation is negative, the dependent variable decreases as the independent variable decreases

# Question

4. Which of the following is indicated if the standard error of estimate for a regression equation is zero ?

The standard deviation of the observed values of the dependent variable is zero

The standard deviation of the independent variable is zero

The observed value of the dependent variable will always be equal to its estimated value, for a given value of the independent variable

There is no correlation between the variables involved

# Question

5. Which of the following is correct when the slope of a regression line is negative ?

There is a negative correlation between the dependent and independent variables

The correlation coefficient between the dependent and independent variables, lies between 0 to 1

The correlation coefficient between the dependent and independent variables is 1

The regression line is parallel to the horizontal axis

# Question

6. Which of the following is correct with regard to a given coefficient of correlation and its corresponding coefficient of determination?

The coefficient of determination is always less than zero

The coefficient of determination is always greater than or equal to zero, and less than or equal to 1

The coefficient of determination is always equal to 1

The coefficient of determination always has the same sign as the coefficient of correlation

# Question

7. Which of the following is the graphical plot of the values of the dependent and independent variables, in the context of regression analysis ?

Frequency polygon

Histogram

Scatter diagram

pie-chart

# Question

8. r will be positive when

Both X and Y decreasing

X decreases, Y increase

X increases, Y decreases

None of the above

# Question

9. If two variables have the linear relationship and X + Y = 100, the correlation will be

0.9

+ 1

– 1

– 0.9

# Question

10. If X – Y = 50, the correlation between X and Y will be

– 1

+ 1

0.5

0.9

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