Consider the following regression model with with a dummy variable d: Which of t

Question

Consider the following regression model with with a dummy variable d: Which of the following statement is true about the following hypotheses? 0 A. The hypotheses tests whether or not a difference exists as d changes from 0 to 1. O B. The hypotheses tests whether or not the interaction exists. C. When the mull bypothesis is not rejected, we conclude that the interaction exists. 0 D. When the null hypothesis is rejected, we conclude that there is no si gnificant difference in y as d changes from, o to

Explanation / Answer

Option A

Here we want to test whether b2 is zero or not. So rejection of H0 implies that there is effect of d in this regression. So this is testing for presence of effect of d in this regression or not.

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