Practice Test Geeks(CEA) Certified Economic Analyst Practice Test
← All CEA Flashcard Decks

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 Granger causality test in time-series econometrics determines whether:

    Answer: Past values of one variable improve the prediction of another variable

    Granger causality tests whether lagged values of variable X provide statistically significant information for forecasting variable Y, beyond Y's own lags.

  2. In principal component analysis (PCA), the first principal component:

    Answer: Is the linear combination of variables that maximizes explained variance

    The first principal component is the direction in variable space along which the data exhibit maximum variance, capturing the most information.

  3. A confidence interval that is constructed using a higher confidence level (e.g., 99% vs. 95%) will, all else equal, be:

    Answer: Wider

    Higher confidence requires a larger critical value (e.g., z = 2.576 for 99% vs. 1.96 for 95%), producing a wider interval that is less precise but more certain to contain the true parameter.

  4. The Augmented Dickey-Fuller (ADF) test is used to:

    Answer: Test whether a time series has a unit root (is non-stationary)

    The ADF test extends the original Dickey-Fuller test by including lagged differences to account for serial correlation when testing for a unit root.

  5. Which measure of central tendency is most affected by extreme outliers?

    Answer: Arithmetic mean

    The arithmetic mean incorporates every observation equally, so extreme values (outliers) can pull it substantially away from the center of the bulk of the data.

  6. In a two-way ANOVA, the interaction term tests whether:

    Answer: The effect of one factor on the outcome depends on the level of the other factor

    A significant interaction term indicates that the combined effect of the two factors is not simply additive—one factor modifies the effect of the other.

  7. When using a panel data model, fixed effects estimation controls for:

    Answer: Time-invariant unobserved individual characteristics

    Fixed effects models remove time-invariant individual-specific unobserved factors by within-transformation (demeaning), eliminating their confounding influence.