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Economics and Management

1. Which of the following is a test of the statistical signficiance of the entire regression equation?
A. t-test
B. R2
C. F-test
D. Durbin-Watson

2. When the R2 of a regression equation is very high, it indicates that

A. all the coefficients are statistically signficant.
B. the intercept term has no economic meaning
C. a high proportion of the variation in the independent variable can be
accounted for by the variation in the independent variables

D. there is a good chance of serial correlation and so the equation must be discarded

3. Which value for the Durbin-Watson test indicates the least likelihood of serial correlation?

A 1
B. 2
C. -3
D. -1

4. The use of a dummy variable in regression analysis

A. indicates that a researcher does not really know what to include in the equation
B. indicates that a variable is expected to either have or not have an impact on a dependent variable
C. indicates that insufficient data is available for the analysis
D. indicates the use of hypthetical data

5. A manager will have the least confidence in an explanatory variable that:

A. does not pass the F-test
B. is expressed as a dummy variable
C. does not pass the t-test
D. consititutes only a small part of R2

Solution Preview

1. Which of the following is a test of the statistical signficiance of the entire regression equation?
A. t-test

2. When the R2 of a regression equation is very high, it ...

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