In Order to Use the T-Statistic for Hypothesis Testing and Constructing

question 25

Multiple Choice

In order to use the t-statistic for hypothesis testing and constructing a 95% confidence interval as $\pm$ 1.96 standard errors, the following three assumptions have to hold:

• A)the conditional mean of u_i, given X_i is zero; (X_i,Y_i), i = 1,2, …, n are i.i.d. draws from their joint distribution; X_i and u_i have four moments
• B)the conditional mean of u_i, given X_i is zero; (X_i,Y_i), i = 1,2, …, n are i.i.d. draws from their joint distribution; homoskedasticity
• C)the conditional mean of u_i, given X_i is zero; (X_i,Y_i), i = 1,2, …, n are i.i.d. draws from their joint distribution; the conditional distribution of u_i given X_i is normal
• D)none of the above

---

Definitions:

Social Contract

A theory or model, originating during the Age of Enlightenment, that typically concerns the legitimacy of the authority of the state over the individual, positing that individuals consent, either explicitly or tacitly, to surrender some of their freedoms in exchange for protection of remaining rights.

Right to a Job

The belief or principle that everyone is entitled to have the opportunity for employment.

Society

A structured community of people bound together by similar traditions, institutions, or nationality.

Simone de Beauvoir

A 20th-century French philosopher and writer, known for her significant contributions to existentialism and feminism, notably through her work "The Second Sex".