ECON 4750/6750 TEST #2 SPRING 2009 Instructions: All questions are to be answered on this examination paper; no extraneous sheets of paper are permitted. Point values for each question are in parentheses to the left of the corresponding numerals and should govern your allocation of time. You may use your textbook, problem sets, and class notes, but you may not collaborate with others. Show all of your work. Time limit: 50 minutes. (20) 1. The most commonly used method for obtaining sample estimates of the population parameters of the linear regression model ii10i X??Y ???? i = 1, ., N is ordinary least squares (OLS), which chooses estimates of ?0 and ?1 so as to minimize the sum of the squared deviations of the Y's from their predicted values; that is, OLS minimizes ? 2i?^ = ? (Yi - Yi)2. Circle the letter(s) corresponding to the equations, below, which are necessarily the result of using OLS to estimate this model: a. ...