A manufacturing plant output model is Q = ß₁+ ß2MGTEFF + ß3CAP + ß4LAB + e, where Q is the output in a particular manufacturing plant, MGTEFF is a managerial efficiency index, CAP is capital stock input index and LAB is labor input index. Measuring MGTEFF is difficult. Suppose Q = B₁+ ß₂EXPER + ß3CAP + ß4LAB + e where EXPER is the plant manager's experience, measured in years is proposed. Why might we worry that EXPER is endogenous? A. Manager's experience may have measurement errors B. Manager's experience maybe correlated with omitted variables.

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24. A manufacturing plant output model is Q = ß₁+ ß2MGTEFF + ß3CAP + ß4LAB + e,
where Q is the output in a particular manufacturing plant, MGTEFF is a managerial
efficiency index, CAP is capital stock input index and LAB is labor input index.
Measuring MGTEFF is difficult. Suppose Q B₁+ B₂EXPER+ ß3CAP + ß4LAB + e
where EXPER is the plant manager's experience, measured in years is proposed. Why
might we worry that EXPER is endogenous?
A. Manager's experience may have measurement errors
B. Manager's experience maybe correlated with omitted variables.
C. Plant output and manager's experience maybe jointly determined.
D. All the above.
25. Ordinary least squares method assumes time series data are stationary. Which of the
following depicts a stationary time series?
18
16-
14-
12-
10-
8-
6
-wymgmgmgmypergunjungmp-rpiqunjungtung
84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16
(a) Real gross domestic product (GDP), Strillion (quarterly)
16
12-
8-
4-
0-
-4
55 60 65
در استان ها با
INF
70 75 80 85 90 95
(c) Inflation, percent (monthly)
A. Real GDP
B. Change in real GDP
C. Inflation
D. Change in inflation
00 05 10 15
стриальную
-0.4mm
vepupupuya
84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16
(b) Change in GDP (quarterly)
0.3
0.2-
0.1-
0.0-
-0.1-
-0.2-
-0.3-
55 60 65
70 75 80 85 90 95 00
(d) Change in inflation (monthly)
וווווווווד
05 10 15
Transcribed Image Text:24. A manufacturing plant output model is Q = ß₁+ ß2MGTEFF + ß3CAP + ß4LAB + e, where Q is the output in a particular manufacturing plant, MGTEFF is a managerial efficiency index, CAP is capital stock input index and LAB is labor input index. Measuring MGTEFF is difficult. Suppose Q B₁+ B₂EXPER+ ß3CAP + ß4LAB + e where EXPER is the plant manager's experience, measured in years is proposed. Why might we worry that EXPER is endogenous? A. Manager's experience may have measurement errors B. Manager's experience maybe correlated with omitted variables. C. Plant output and manager's experience maybe jointly determined. D. All the above. 25. Ordinary least squares method assumes time series data are stationary. Which of the following depicts a stationary time series? 18 16- 14- 12- 10- 8- 6 -wymgmgmgmypergunjungmp-rpiqunjungtung 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 (a) Real gross domestic product (GDP), Strillion (quarterly) 16 12- 8- 4- 0- -4 55 60 65 در استان ها با INF 70 75 80 85 90 95 (c) Inflation, percent (monthly) A. Real GDP B. Change in real GDP C. Inflation D. Change in inflation 00 05 10 15 стриальную -0.4mm vepupupuya 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 (b) Change in GDP (quarterly) 0.3 0.2- 0.1- 0.0- -0.1- -0.2- -0.3- 55 60 65 70 75 80 85 90 95 00 (d) Change in inflation (monthly) וווווווווד 05 10 15
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