Question 1

What are reduced form equations in a system of equations?

Accepted Answer

A) the structural equations rewritten with endogenous variables as a function of exogenous variables 
B) the structural equations without the endogenous regressors 
C) the exogenous variables reworked as a function of the other exogenous variables 
D) the equations remaining when the parameters of structural equations are reduced to generate additional degrees of freedom 
A) the structural equations rewritten with endogenous variables as a function of exogenous variables 
B) the structural equations without the endogenous regressors 
C) the exogenous variables reworked as a function of the other exogenous variables 
D) the equations remaining when the parameters of structural equations are reduced to generate additional degrees of freedom A

Question 2

In a system of 4 simultaneous equations,how many endogenous variables must be excluded from an equation in the system for the parameters to be identified?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4 C

Question 3

In a multi-equation model the jointly determined variables are referred to as____________.

Accepted Answer

A) exogenous 
B) explanatory 
C) regressors 
D) endogenous 
A) exogenous 
B) explanatory 
C) regressors 
D) endogenous D

Question 4

What is the first stage of 2SLS?

Accepted Answer

A) estimate parameters of reduced form equations and find predicted values 
B) find a random sample large enough to divide into 2 separate samples for the two stages 
C) estimate parameters of the structural equations using OLS 
D) use reduced form parameter estimates as explanatory variables 
A) estimate parameters of reduced form equations and find predicted values 
B) find a random sample large enough to divide into 2 separate samples for the two stages 
C) estimate parameters of the structural equations using OLS 
D) use reduced form parameter estimates as explanatory variables

Question 5

What does it mean for a structural equation to be unidentified?

Accepted Answer

A) too many endogenous variables are included in the equation to estimate a unique parameter value 
B) the sample size is not large enough to rely on asymptotic estimator properties 
C) the simultaneous nature of the equations makes random samples impossible to obtain 
D) the sample size is not large enough to allow M*(M-1)degrees of freedom 
A) too many endogenous variables are included in the equation to estimate a unique parameter value 
B) the sample size is not large enough to rely on asymptotic estimator properties 
C) the simultaneous nature of the equations makes random samples impossible to obtain 
D) the sample size is not large enough to allow M*(M-1)degrees of freedom

Question 6

How does the least squares estimator perform on a simultaneous equation model with an endogenous regressor?

Accepted Answer

A) unbiased and consistent in large samples 
B) unbiased but inconsistent in all sample sizes 
C) biased but consistent in large samples 
D) biased and inconsistent for structural equations,but unbiased and consistent for reduced form equations 
A) unbiased and consistent in large samples 
B) unbiased but inconsistent in all sample sizes 
C) biased but consistent in large samples 
D) biased and inconsistent for structural equations,but unbiased and consistent for reduced form equations

Question 7

What are the implications for 2SLS estimators if reduced form parameter estimates are statistically insignificant?

Accepted Answer

A) still consistent in large samples,but no longer BLUE 
B) there will be correlation in the structural equations,causing estimators to be inconsistent 
C) there are no consequences,only structural parameters matter 
D) small sample properties no longer hold,but asymptotic properties still apply 
A) still consistent in large samples,but no longer BLUE 
B) there will be correlation in the structural equations,causing estimators to be inconsistent 
C) there are no consequences,only structural parameters matter 
D) small sample properties no longer hold,but asymptotic properties still apply

Question 8

Why is it best to use specialized software to estimate 2SLS?

Accepted Answer

A) specialized t-values are needed for inference and hypothesis testing 
B) the  $ \tau $distribution is not widely available otherwise 
C) it is algebraically difficult to find structural parameter estimates from reduced form estimates,so the software needs to use specialized algorithms when algebra does not work 
D) it is too easy to make a data handling mistake when capturing predicted values to use as regressors in the second stage 
A) specialized t-values are needed for inference and hypothesis testing 
B) the  $ \tau $distribution is not widely available otherwise 
C) it is algebraically difficult to find structural parameter estimates from reduced form estimates,so the software needs to use specialized algorithms when algebra does not work 
D) it is too easy to make a data handling mistake when capturing predicted values to use as regressors in the second stage

Question 9

When estimating the structural parameters of simultaneous equation models,how do least squares estimates,compare to the true value of $\beta$?

Accepted Answer

A)   
B)   
C)   
D) The direction of the bias depends on the sample correlation. 
A)   
B)   
C)   
D) The direction of the bias depends on the sample correlation.

Question 10

If a structural model has M simultaneous equations,what is the necessary condition for a unique parameter value to be consistently estimated for each variable in the equation?

Accepted Answer

A) The number of endogenous variables excluded from the equation must be at least as large as M-1 
B) the number of endogenous variables excluded must be at least M/2 
C) the number of exogenous variables in the equation must be greater than the number of endogenous variables in the equation 
D) the sample size must be large enough to allow M * (M-1)degrees of freedom 
A) The number of endogenous variables excluded from the equation must be at least as large as M-1 
B) the number of endogenous variables excluded must be at least M/2 
C) the number of exogenous variables in the equation must be greater than the number of endogenous variables in the equation 
D) the sample size must be large enough to allow M * (M-1)degrees of freedom

Question 11

What does 2SLS abbreviate?

Accepted Answer

A) twice squared linear series 
B) second summed linear sample 
C) second order stationary logical sequence 
D) two stage least squares 
A) twice squared linear series 
B) second summed linear sample 
C) second order stationary logical sequence 
D) two stage least squares

Question 12

What is the 2nd stage of 2SLS?

Accepted Answer

A) estimate parameters of reduced form equations and find predicted values 
B) find a random sample large enough to divide into 2 separate samples for the two stages 
C) estimate parameters of the structural equations using predicted values from reduced form equations 
D) use reduced form parameter estimates as explanatory variables 
A) estimate parameters of reduced form equations and find predicted values 
B) find a random sample large enough to divide into 2 separate samples for the two stages 
C) estimate parameters of the structural equations using predicted values from reduced form equations 
D) use reduced form parameter estimates as explanatory variables

Question 13

How does the least squares estimator perform on a simultaneous equation model with an endogenous regressor?

Accepted Answer

A) unbiased and consistent in large samples 
B) biased and inconsistent in all sample sizes 
C) biased but consistent in large samples 
D) unbiased but inconsistent unless collected through random sampling 
A) unbiased and consistent in large samples 
B) biased and inconsistent in all sample sizes 
C) biased but consistent in large samples 
D) unbiased but inconsistent unless collected through random sampling

Question 14

In a system of M simultaneous equations,at least M-1 variables must be excluded from each equation for the equation to be identified.What does it mean if the equation is not identified?

Accepted Answer

A) unique coefficient estimates for each variable cannot be identified using least squares 
B) the economic value of the predicted value cannot be identified 
C) the economic relationships are unclear and the equation should be dropped form the system 
D) the exogenous variables have been incorrectly identified 
A) unique coefficient estimates for each variable cannot be identified using least squares 
B) the economic value of the predicted value cannot be identified 
C) the economic relationships are unclear and the equation should be dropped form the system 
D) the exogenous variables have been incorrectly identified

Question 15

What estimation technique should be used to estimated parameters in an unidentified structural equation?

Accepted Answer

A) none-no techniques exist 
B) OLS 
C) 2SLS 
D) GLS 
A) none-no techniques exist 
B) OLS 
C) 2SLS 
D) GLS

What are reduced form equations in a system of equations?

In a system of 4 simultaneous equations,how many endogenous variables must be excluded from an equation in the system for the parameters to be identified?

In a multi-equation model the jointly determined variables are referred to as____________.

What is the first stage of 2SLS?

What does it mean for a structural equation to be unidentified?

How does the least squares estimator perform on a simultaneous equation model with an endogenous regressor?

What are the implications for 2SLS estimators if reduced form parameter estimates are statistically insignificant?

Why is it best to use specialized software to estimate 2SLS?

When estimating the structural parameters of simultaneous equation models,how do least squares estimates,compare to the true value of $\beta$ ?

If a structural model has M simultaneous equations,what is the necessary condition for a unique parameter value to be consistently estimated for each variable in the equation?

What does 2SLS abbreviate?

What is the 2^nd stage of 2SLS?

How does the least squares estimator perform on a simultaneous equation model with an endogenous regressor?

In a system of M simultaneous equations,at least M-1 variables must be excluded from each equation for the equation to be identified.What does it mean if the equation is not identified?

What estimation technique should be used to estimated parameters in an unidentified structural equation?

An Introduction to Econometrics

Pp : Prob, Probability Primer, Probability Primer

The Simple Linear Regression Model

Interval Estimation and Hypothesis Testing

Prediction, Goodness-Of-Fit and Modeling Issues

The Multiple Regression Model

Further Inference in the Multiple Regression Model

Using Indicator Variables

Heteroskedasticity

Regression With Time Series Data: Stationary Variables

Random Regressors and Moment Based Estimation

Regression With Time Series Data: Nonstationary Variables

Vector Error Correction and Vector Autoregressive Models

Time-Varying Volatility and Arch Models

Panel Data Models

Qualitative and Limited Dependent Variable Models

Filters

Exam 12: Simultaneous Equations Models

What are reduced form equations in a system of equations?

In a system of 4 simultaneous equations,how many endogenous variables must be excluded from an equation in the system for the parameters to be identified?

In a multi-equation model the jointly determined variables are referred to as____________.

What is the first stage of 2SLS?

What does it mean for a structural equation to be unidentified?

How does the least squares estimator perform on a simultaneous equation model with an endogenous regressor?

What are the implications for 2SLS estimators if reduced form parameter estimates are statistically insignificant?

Why is it best to use specialized software to estimate 2SLS?

When estimating the structural parameters of simultaneous equation models,how do least squares estimates,compare to the true value of β\betaβ ?

If a structural model has M simultaneous equations,what is the necessary condition for a unique parameter value to be consistently estimated for each variable in the equation?

What does 2SLS abbreviate?

What is the 2nd stage of 2SLS?

How does the least squares estimator perform on a simultaneous equation model with an endogenous regressor?

In a system of M simultaneous equations,at least M-1 variables must be excluded from each equation for the equation to be identified.What does it mean if the equation is not identified?

What estimation technique should be used to estimated parameters in an unidentified structural equation?

An Introduction to Econometrics

Pp : Prob, Probability Primer, Probability Primer

The Simple Linear Regression Model

Interval Estimation and Hypothesis Testing

Prediction, Goodness-Of-Fit and Modeling Issues

The Multiple Regression Model

Further Inference in the Multiple Regression Model

Using Indicator Variables

Heteroskedasticity

Regression With Time Series Data: Stationary Variables

Random Regressors and Moment Based Estimation

Regression With Time Series Data: Nonstationary Variables

Vector Error Correction and Vector Autoregressive Models

Time-Varying Volatility and Arch Models

Panel Data Models

Qualitative and Limited Dependent Variable Models

Filters

When estimating the structural parameters of simultaneous equation models,how do least squares estimates,compare to the true value of $\beta$ ?

What is the 2^nd stage of 2SLS?