Estimation by WLS

question 44

Multiple Choice

Estimation by WLS

• A)although harder than OLS, will always produce a smaller variance.
• B)does not mean that you should use homoskedasticity-only standard errors on the transformed equation.
• C)requires quite a bit of knowledge about the conditional variance function.
• D)makes it very hard to interpret the coefficients, since the data is now weighted and not any longer in its original form.

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Definitions:

Minimum Wage

The lowest legal salary that employers can pay workers, intended to protect workers from unduly low pay.

Positive Economic Statement

An objective statement based on facts and evidence that can be tested and validated, concerning how the economy works.

Inflation

The rate at which the general level of prices for goods and services rises, eroding purchasing power.

Production Possibility Frontier

A graphical representation that shows the maximum quantity of two goods or services that a society can produce given fixed resources and technology, assuming all resources are fully employed.