10) In a Randomized Complete Block Design one of the two factors in the analysis is an extraneous variable (we are not directly interested in it) that is called a block. Explain the goal of including the extraneous variable in the analysis.2. Steps in empirical economic analysis Use the following table to indicate the correctly ordered steps in conducting an empirical economic analysis to test an economic theory. Steps 1. Formulate the question of interest 2. Specify an econometric model 3. Construct a formal or informal economic model 4. Estimate model parameters using econometric methods 5. Collect data 6. State hypothesis in terms of model parameters In an empirical economic analysis, how does the econometric model relate to the economic model? Check all that apply. The economic theory is used to choose the variables in the economic model but not the variables in the econometric model. The econometric model attempts to account for the variables in the economic model that cannot be reasonably observed. The econometric model imposes a functional form on the more generally specified economic model. The econometric model is identical to the economic model.(7.1b-e) Suppose we are able to collect a random sample of data on economics majors at a large university. Further suppose that, for those entering the workforce, we observe their employment status and salary 5 years after graduation. Let SAL = $ salary for those employed, GPA = grade point average on a 4.0 scale during their undergraduate program, with METRICS = 1 if student took econometrics, METRICS = 0 otherwise. a. Assuming B2 and B; are positive, draw a sketch of E(SALIGPA, METRICS) = By+ $2GPA+ B; METRICS. b. Define a dummy variable FEMALE = 1, if the student is a female; 0 otherwise. Modify the regression model to be SAL = B,+B2GPA+ B; METRICS+OFEMALE+e. What is the expected salary of a male who has not taken econometrics? What is the expected salary of a female who has taken econometrics? c. Consider the regression model SAL = 1+BGPA+3METRICS+6, FEMALE+52 (FEMALE:METRICS)- e What is the expected salary of a male who has not taken econometrics? What is the expected salary of a female who has taken econometrics? (Please note that actual numeric values are not required. Simply modify the equation depending on the relevant indicator variables). d. For the equation given in part c, assume that 6,