Regression analysis was applied between sales data (y in $1000s) and advertising data (x in $100s) and the following information was obtained. = 12 + 1.8x

N = 17
SSR = 225
SSE = 75
Sb₁ = .2683
The t statistic for testing the significance of the slope is

Question

Regression analysis was applied between sales data (y in $1000s) and advertising data (x in $100s) and the following information was obtained.

= 12 + 1.8x

N = 17
SSR = 225
SSE = 75
Sb₁ = .2683
The t statistic for testing the significance of the slope is

Quizplus · Accepted Answer

To find the t-statistic, we need to calculate the standard error of the slope (SEb). SEb = sqrt(SSE / (n-2) * Sb₁) = sqrt(75 / 15 * 0.2683) = 0.919. Then, the t-statistic is calculated as t = b / SEb = 1.8 / 0.919 = 1.96 (rounded to two decimal places). The critical value for a two-tailed test with 15 degrees of freedom at alpha = 0.05 is also 1.96. Since the t-statistic is greater than this critical value, we can conclude that the slope is significant at the 5% level. Therefore, the answer is choice C.

Regression Analysis Was Applied Between Sales Data (Y in $1000s)