Question

[8] A simple regression was performed using data on 50 states in USA. The variables were Y = current value of capital building (millions of dollars) and X = total debt held by each state bank (millions of dollars). Use α=0.01

Variables	Coefficients	Standard error
Intercept Debt	b0 = 478.54 b1 = 2.80	Sb0 = 19.43 Sb1 = 0.79

a) Use the degree of freedom (df=n-2 =48) for the t-test and find the two-tailed critical value for t by using the table

b) Construct the 99 % confidence interval for the slope (β1 $+0SwAAAAASUVORK5CYII=$ ). NOTE : CI for true slope è [ b1- tα/2Sb1≤ β1≤  b1+ tα/2Sb1 ]

c) Can you tell the result of Hypothesis test if the slope = 0 with 99 % level of significance?    Explain why?

Answer 1

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