Question 17 9.2 pts Consider a situation where economic theory suggests that you

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Question 17 9.2 pts Consider a situation where economic theory suggests that you impose certain restrictions on your estimated multiple regression function. To test the validity of your restrictions, you have your statistical package calculate the corresponding F-statistic. Suppose that the number of observations is 1,732, the number of restrictions is 7 and the F-statistic is 4.92 Q19. Find the critical value from the F-distribution (table 5c) at the 1% level Q20 Do you reject or fail to reject the null hypothesis at 1% significance level? Choose the choice number from below 1, Reject 2, Fail to Reject

Explanation / Answer

Solution:-

19) Fcritical(0.01, 6, 1725) = 2.893

D.FNumerator = k - 1

D.FNumerator = 7 - 1

D.FNumerator = 6

D.FDenominator = n - k

D.FDenominator = 1732 - 7

D.FDenominator =  1725

Alpha = 0.01

Fcritical(0.01, 6, 1725) = 2.893

20) Since the F-value(4.92) is greater than Fcritical(2.893), hence we have to reject the null hypothesis.

1) Reject

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