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Econometric Models And Methods Question Paper

Econometric Models And Methods

Course:Bachelor Of Business Administration

Institution: Kenyatta University question papers

Exam Year:2009

KENYATTA UNIVERSITY

INSTITUTE OF OPEN LEARNING
UNIVERSITY EXAMINATIONS 2008/2009
EXAMINATION FOR THE DEGREE OF BACHELOR OF BUSINESS
ADMINISTRATION
BMS 404: ECONOMETRIC MODELS AND METHODS

DATE: FRIDAY 9TH JANUARY 2009
TIME: 10.00 A.M. – 12.00 NOON

INSTRUCTIONS:
1.
Answer Question ONE and any other TWO questions.

QUESTION ONE
a)
Given the following hypothetical data on compensation per hour (Y) and
output per hour (X) in agricultural sector.
YEAR
Y
X
YEAR
Y
X
1993
96.8
95.9
2001
95.8
100.7
1994
95.4
93.9
2002
97.3
100.3
1995
96.0
95.7
2003
98.2
103.0
1996
98.8
98.3
2004
97.9
105.5
1997
100.0
100.0
2005
98.8
107.7
1998
100.9
100.8
2006
101.2
110.1
1999
99.4
99.6
2007
101.5
111.0
2000
96.7
99.3

Estimate the parameters ? and ? for the regression equation and interpret your
o
1
findings.

(10 marks)

1
b)
State and explain the basic assumptions of the linear stochastic regression
model.

(10 marks)

c)
The following table gives the gross national product (X) and demand for food
Y measured in arbitrary units in an undeveloped country over ten year period.

Estimate the food function Y ? b ? b ? ? .

(10 marks)
o
1

Year
1998
1999 2000
2001 2002
2003 2004 2005
2006 2007
Y
6
7
8
10
8
9
10
9
11
10
X
50
52
55
59
57
58
62
65
78
70

QUESTION TWO
Discuss the methodology of econometric research.
(20 marks)

QUESTION THREE
Six software companies were chosen at random from the list of major software
companies in the country in order to determine the relationship between the number of
employees and the annual profit. The following table represent the number of company
employees X (in hundreds) and annual profit Y (in million of shillings).

X
Y
6.4
1.8
9.0
2.0
13.6
7.2
17.4
12.4
22.4
16.2
23.1
17.2

2

a)
Estimate the value of regression coefficient ? and ?

(5 marks)
o
1
b)
Interpret the meaning of regression coefficient ? in this problem. (5 marks)
o
c)
Calculate the standard error of the estimate.

(5 marks)
d)
Calculate the coefficient of correlation and coefficient of determination.
(5 marks)

QUESTION FOUR
Discuss the relationships between Economics, mathematics, statistics and econometrics.

(20 marks)

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Econometric Models And Methods Question Paper

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