The Intuition Behind a Test of Joint Significance Is That

question 27

Multiple Choice

The intuition behind a test of joint significance is that if a subset of variables is jointly significant,then

• A)the unexplained sum of squares should be much larger in the restricted regression than in the unrestricted regression.
• B)the unexplained sum of squares should be much smaller in the restricted regression than in the unrestricted regression.
• C)the explained sum of squares should be much smaller in the restricted regression than in the unrestricted regression.
• D)the total sum of squares should be much larger in the restricted regression than in the unrestricted regression.

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Definitions:

Marginal Utilities

The added satisfaction or utility that a person receives from consuming an additional unit of a good or service.

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Usually small amounts of money given to children by their parents on a regular basis.

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Marginal Utility

The additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.