Why Should Good Non-Sample Information Be Incorporated into an Econometric

question 10

Multiple Choice

Why should good non-sample information be incorporated into an econometric model via restricted least squares?

• A)it reduces the variance of estimated coefficients without introducing bias
• B)it allows more precise hypotheses testing to be done
• C)it reduces the degrees of freedom in the denominator of an F-test
• D)It reduces the probability of rejecting a true null hypothesis

---

Definitions:

Liable

Being legally responsible for something, especially in terms of owing money or being obligated to perform under the terms of a contract.

Real Estate Agent

A professional authorized to negotiate and conduct real estate transactions on behalf of sellers and buyers.

Written Offer

A formal proposal presented in written form to engage in a contract or agreement.

Real Estate Agent

A professional licensed to arrange real estate transactions, representing either buyer or seller.