Question
You have estimated a model with 7 independent variables and N=32 observations. The sum-of squared residuals for this model is SSR-2000. Three of the
You have estimated a model with 7 independent variables and N=32 observations. The sum-of squared residuals for this model is SSR-2000. Three of the estimated slope coefficients are not significantly different from zero based on a t-test. You decide to test the null hypothesis that the three coefficients are simultaneously equal to zero. For your restricted model you obtain SSR-2600. What is the appropriate test to use? What is the critical value of the appropriate test statistic given a 5% significance level? What is the calculated test statistics? Do you reject or not reject the null hypothesis?
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