Homework Clinic
Social Science Clinic => Economics => Topic started by: laurencescou on Jun 29, 2018
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The reason why estimators have a sampling distribution is that
A) economics is not a precise science.
B) individuals respond differently to incentives.
C) in real life you typically get to sample many times.
D) the values of the explanatory variable and the error term differ across samples.
Question 2
Using the fact that the standardized variable Z is a linear transformation of the normally distributed random variable Y, derive the expected value and variance of Z.
What will be an ideal response?
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Answer to Question 1
Answer: D
Answer to Question 2
Answer: Z = Y = a + bY, with a = - and b = . Given (2.29) and (2.30) in the text, E(Z) = - + = 0, and .