The University of Illinois at Chicago
Economics 346: Econometrics
Helen Roberts
Review Questions for the Midterm
e-mail: hroberts@uic
Phone: 355-0378
These questions are worth 5 points each.
1. What should the slope of a regression line through the residuals be?
2. True or false and explain: The correlation between 2 variables is the same as a
regression between 2 variables.
3. You have run a regression, with 100 observations, on the relationship between
prices paid and quantity bought, and the t-statistic on the slope coefficient is -5.86.
What does this tell you?
4. How does the population regression function differ from the sample regression
function?
These questions are each worth 10 points.
5. What is R2 and what does it measure? (Include in your answer the relationship of
R2 to something else, as well.)
6. Why do we assume that the ordinary least squares estimators are normally
distributed, and why do we care?
7. Discuss the 6 assumptions underlying the classical linear regression model, method
of least squares.
Review also the problem set questions and the end of chapter questions.
