Question

Suppose the competing hypotheses in testing for individual significance are H0: βj = 0 versus HA: βj ≠ 0. What would rejecting the null hypothesis imply?

A. xj explains all the variation in y
B. xj is not significant in explaining y
C. xj is significant in explaining y
D. We would accept the null hypothesis

Answer 1

Rejecting the null hypothesis implies that xj is significant in explaining y.

Step-by-step explanation:

When performing a hypothesis test with the competing hypotheses H0: βj = 0 versus HA: βj ≠ 0, rejecting the null hypothesis would imply that xj is significant in explaining the dependent variable y.

In other words, there is evidence to suggest that the coefficient βj is not equal to zero, indicating that the independent variable xj has a significant effect on y.