4. Two important econometric concepts are the stochastic error term and the residual. Carefully distinguish
between these two concepts, being sure to:
a. Define stochastic error term
b. Define residual
c. Why must a stochastic error term be present in a regression equation?
5. A source of constant discussion among applied econometricians is the degree to which measures of the
overall fit of an estimated equation also measure the quality of that regression. The two most used
measures of overall fit are $R^2$ and $adj.R^2$.
a. Carefully distinguish between $R^2$ and $adj.R^2$
b. Of the two, which do you recommend typically using? Why?
c. Explain (interpret) what is meant by $adj.R^2$=.35?
6. Reflect upon your time at Augsburg. Was there a particular class that made a difference to you? Did you
take a study abroad course, become involved in sports, do an internship or be part of a campus
organization that transformed your thinking? Was there a professor or a classmate or a staff member that
made an impact on you? Describe three examples of things you did at Augsburg that will have a lasting
impression. Was there something at Augsburg that helped you find your vocation?
7. Finally, work on your research. Start searching for articles related to your topic. Learn about your topic.
As you read the articles, you will learn what past researchers have done on how to analyze your topic.
Start summarizing and writing down your summaries. This will become your literature review.