Choose the best answer and breifly explain your reasoning.
1.) Which of the following is valid for R^2 of a linear regression?
A.) A high R^2 means that the regression must be right.
B.) A low R^2 means that the regressors are not strong predictors of the outcome of interest.
C.) R^2 can be any positive number
D.) One can use R^2 to choose between two regressions. The one with a higher R^2 should always be chosen.
2.) To estimate a simple linear regression wage = a + B age + u, using a sample of college graduates, which of the following will cause the estimated B by OLS to be smaller?
A.) Measuring age in months instead of years.
B.) Using yearly wage instead of weekly age.
C.) A smaller sample
D.) A larger sample
3.) To estimate a simple linear regression wage = a + B age + u, using a sample of college graduates, which of the following will tend to cause the t statistic of the OLS estimate `B (Beta hat) to be larger, i.e., more significant estimate `B?
A.) Measuring the age in years instead of months
B.) Measuring the wage in thousands of dollars instead of dollars
C.) A smaller sample
D.) A larger sample