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This particular Assignment references the syllabus chosen for the subject of Economics, for the July 2020 - January 2021 session. The code for the assignment is MECE-01 and it is often used by students who are enrolled in the MA Degree.
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1. Consider the Cobb-Douglas production function given by (standard notations apply) where u is the stochastic error term.
i) Find OLS estimators for
ii) Find standard error of the OLS estimator .
iii) Prove that OLS estimator is BLUE.
2. What is meant by indirect least squares method? Explain how the following model can be estimated using this method.
where Q = quantity, P = price and X = income.
3. What is meant by multicollinearity. What are its consequences on estimates? What remedial measures do you suggest for the problem?
4. Consider the two variable regression model where the error term follows
i) What are the problems encountered by data in the above model?
ii) Explain one of the procedures you would follow to estimate the model.
5. Explain the steps you would follow in estimation of parameters through the method of Generalised Least Squares (GLS).
6. What is meant by Gauss-Markov theorem? What assumptions are required to prove Gauss Markov theorem? For the regression model show that the theorem is true for the estimate of
7. Write short notes on the following:
a) Rank and Order Conditions
b) Maximum Likelihood Method of Estimation
This section carry 20 marks each (to be answered in about 500 words each).
This section carry 12 marks each (to be answered in about 300 words each).
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