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Author Question: Misspecification of functional form of the regression function A) is overcome by adding the ... (Read 130 times)

c0205847

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on: Jun 29, 2018
Misspecification of functional form of the regression function
 
  A) is overcome by adding the squares of all explanatory variables.
  B) is more serious in the case of homoskedasticity-only standard error.
  C) results in a type of omitted variable bias.
  D) requires alternative estimation methods such as maximum likelihood.

Question 2

It is advisable to use clustered standard errors in panel regressions because
 
  A) without clustered standard errors, the OLS estimator is biased
  B) hypothesis testing can proceed in a standard way even if there are few entities (n is small)
  C) they are easier to calculate than homoskedasticity-only standard errors
  D) the fixed effects estimator is asymptotically normally distributed when n is large


Qarqy

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Answer: C

Answer to Question 2

Answer: D


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