Question

To study the effect of $X_1$ and $X_2$ on Y, the following regression model is estimated using a large sample:
$ Y = a + \beta_1 X_1 + \beta_2X_2 + ∈ $
The OLS estimates and standard errors are presented below:

	$a$	$\beta_1$	$\beta_2$
Estimates	2.3	0.39	1.8
Standard errors	1.15	0.13	1

Given the above information, which of the following is CORRECT?

• A. $a$ is statistically significant at 1% level, $\beta_1$ is statistically significant at 5% level, and $\beta_2$ is statistically significant at 10% level
• B. $a$ is statistically significant at 1% level, $\beta_1$ is statistically significant at 10% level, and $\beta_2$ is statistically significant at 5% level
• C. $a$ is statistically significant at 5% level, $\beta _1$ is statistically significant at 1% level, and $\beta _2$ is statistically significant at 10% level
• D. $a$ is statistically significant at 5% level, $\beta_1$ is statistically significant at 10% level, and $\beta_2$ is statistically significant at 5% level

Hint:

255

Answer 1

The Correct Option is C

The correct answer is (C): $a$ is statistically significant at 5% level, $\beta _1$ is statistically significant at 1% level, and $\beta _2$ is statistically significant at 10% level