Practice Test Geeks(CEA) Certified Economic Analyst Practice Test
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Data Analysis & Statistical Methods Flashcards

7 cards from real CEA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Data Analysis & Statistical Methods flashcards as text

  1. The Central Limit Theorem (CLT) states that as sample size increases, the sampling distribution of the sample mean:

    Answer: Becomes approximately normal regardless of the population distribution

    The CLT guarantees that the sampling distribution of the mean approaches normality as n increases, even if the underlying population is non-normal.

  2. A p-value of 0.03 in a hypothesis test with α = 0.05 means:

    Answer: There is a 3% probability of observing a result this extreme if the null hypothesis is true

    The p-value is the probability of obtaining a test statistic as extreme as observed, assuming the null hypothesis is true.

  3. Which of the following best describes heteroskedasticity in a regression model?

    Answer: The variance of the error term changes with the level of an independent variable

    Heteroskedasticity means the spread (variance) of residuals is not constant and often increases or decreases with the magnitude of an explanatory variable.

  4. An economist runs a regression and finds the R² = 0.85. This means:

    Answer: 85% of the variation in the dependent variable is explained by the independent variables

    R² (coefficient of determination) measures the proportion of total variance in the dependent variable that is explained by the regressors.

  5. In a box plot, an observation is typically flagged as an outlier if it lies:

    Answer: Beyond 1.5 × IQR from the nearest quartile

    The conventional box plot rule labels values beyond Q1 − 1.5×IQR or Q3 + 1.5×IQR as outliers (shown as individual points).

  6. A cointegrated pair of time series is best described as two series that:

    Answer: Share a common long-run stochastic trend

    Cointegrated series are individually non-stationary (typically I(1)) but a linear combination of them is stationary, reflecting a long-run equilibrium relationship.

  7. Stratified random sampling is preferred over simple random sampling when:

    Answer: Important subgroups must be adequately represented in the sample

    Stratified sampling divides the population into subgroups (strata) and samples from each, ensuring representation of key segments and often improving precision.