Questions for Practice
Question Statement
Describe the sample regression line for the two-variable regression model.
Compare regression and correlation for a two-variable regression model.
Describe the stochastic specification of SRF.
Describe by giving an example of how regression is different from causation.
The nature of the disturbance term in regression modelling is stochastic. Explain by giving
suitable reasons.
Discuss the goodness of fit for the two-variable regression model.
Express the formula to compute the coefficient of determination.
Construct the confidence interval for the intercept of two-variable regression model.
State Gauss-Markov Theorem for the two-variable regression model.
Describe the role of the residual term in regression modelling.
Discuss the confidence interval for slope and intercept coefficients for two variable
regression model.
Explain the statistical properties of least square estimators.
The following data is given as:
Y 115 140 155 150
X 180 220 240 260
Here Y is regressand and X is regressor. Determine the coefficient of determination.
Discuss testing of significance for the variance of the error term.
Explain the concept of multiple regression equations.
Explain the testing of the significance of regression coefficients for the multiple variable
regression model.
Explain R2, adjusted R2 and partial correlation coefficients for three-variable regression
model.
Explain multiple regression equations for a three-variable regression model.
Explain the concept of joint significance for three-variable regression model.
The following table contains observations on the expenditure on clothing (Y), total
expenditure (X2) and the price of clothing (X3).
Y 3.5 5 6 7 14
X2 15 30 42 50 90
X3 16 10 7 7 2
Estimate the parameters and variance of error term for the given data.
The following table contains observations on the dependent variable (Y), the explanatory
variables (X2) and (X3).
Y 6 9 8 12 14
X2 42 54 65 85 90
X3 7 5 4 3.5 2
Determine adjusted R2.
Many monetary economists argue that the level of deposits is determined by the stock of
bills and the liquidity ratio. Evaluate the regression coefficients and R2.
Stock of bills (lakh ₹) 3070 3270 3170 3500 2890
Liquidity Ratio (%) 35.1 33.5 32.7 32.1 32.2
Deposits (lakh ₹) 6447 6682 6817 7207 7818
Discuss the three-variable regression model by using multiple regression equations.
From the following sample data, calculate the estimated parameters of the saving function:
Year 1951 1952 1953 1954 1955
Saving 25 25 30 33 38
NI 110 130 140 160 170
Interest 0.02 0.03 0.02 0.03 0.04
Also, develop the general confidence interval for the partial intercept coefficient.
Explain for the three-variable regression model how is the individual testing of significance
for regression coefficient different from joint testing of significance.
From the following data, compute the regression of Y on X2 and X3.
Y X2 X3
17 29 22
42 64 35
41 81 36
31 74 34
35 66 37
Test the significance of partial intercept at 5% level of significance and calculate
the confidence interval for the same. [Tabulated Value is 3.456]
Discuss the causes of multicollinearity in detail.
Explain the remedial measures for autocorrelation.
Write the effects of heteroscedasticity in the regression model.
Explain the consequences of multicollinearity.
Explain multicollinearity and discuss the remedial measures.
Examine the problem of autocorrelation in regression model and discuss the remedial
measures of the same.
Sketch the different views of multicollinearity in a multiple variable regression model and
discuss its consequences.
Explain the CLRM assumption of a no-autocorrelation in the regression model. Also, discuss
the consequences of autocorrelation.
