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A mathematical model in which the outcome is exactly determined through known
relationships between events, without any space for random variation, is called a
deterministic model. In these types of models, a specific input will always produce the
same output. Examples of these type of models are often found in fields like classical
physics, such as Newtons law of gravity. In econometrics, we are, however, more
interested in statistical/stochastic relationships. Using an example, define and discuss
statistical models. (5)
1.2) Regression analysis deals with the dependence of one variable on other variables.
However, dependence does not imply causation. When can causation be plausibly
claimed?
(2)
1.3) Explain the difference between cross-sectional, time-series and panel data? Provide
examples of each. (3

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A mathematical model in which the outcome is exactly determined thro.pdf

  • 1. A mathematical model in which the outcome is exactly determined through known relationships between events, without any space for random variation, is called a deterministic model. In these types of models, a specific input will always produce the same output. Examples of these type of models are often found in fields like classical physics, such as Newtons law of gravity. In econometrics, we are, however, more interested in statistical/stochastic relationships. Using an example, define and discuss statistical models. (5) 1.2) Regression analysis deals with the dependence of one variable on other variables. However, dependence does not imply causation. When can causation be plausibly claimed? (2) 1.3) Explain the difference between cross-sectional, time-series and panel data? Provide examples of each. (3