FINANCE
RM chap4.docx

# If test statistic is larger than the upper critical

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if test statistic is larger than the upper critical value or smaller than lower critical value. Otherwise, do not reject H 0. 5. Test statistic: t= -13.0035 6. Decision: Reject H 0. The test statistic (-13.0035) is smaller than the lower critical value (- 2.787). 7. Conclusion: We have enough evidence to conclude that β 4 ≠0. Interest rate is significantly related to inflation. Significance level=5% Let β 4 =Interest rate 1. H 0 : β 4 =0 H 1 : β 4 ≠0 2. Significant level: α=5% 3. Critical value: t α/2,n-k-1 = t 0.05/2,30-4-1= ±2.060 4. Decision rule: Reject H 0 if test statistic is larger than the upper critical value or smaller than lower critical value. Otherwise, do not reject H 0. 5. Test statistic: t= -13.0035 6. Decision: Reject H 0. The test statistic (-13.0035) is smaller than the lower critical value (- 2.060). 7. Conclusion: We have enough evidence to conclude that β 4 ≠0. Interest rate is significantly related to inflation. Significance level=10% Let β 4 =Interest rate 1. H 0 : β 4 =0 H 1 : β 4 ≠0 2. Significant level: α=10% 3. Critical value: t α/2,n-k-1 = t 0.10/2,30-4-1= ±1.708 4. Decision rule: Reject H 0 if test statistic is larger than the upper critical value or smaller than lower critical value. Otherwise, do not reject H 0. 5. Test statistic: t= -13.0035 6. Decision: Reject H 0. The test statistic (-13.0035) is smaller than the lower critical value (- 1.708).

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7. Conclusion: We have enough evidence to conclude that β 4 ≠0. Interest rate is significantly related to inflation.
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• Summer '17
• ms lau
• Inflation, 1%, 4.4.3.2, 4.4.3.1, 4.4.3.3, 4.4.3.4

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