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Which
of
the
following
is
NOT
a
prediction
of
the
fitted
model?
A)
A
1-year
increase
in
education
raises
the
wage
by
$1.50
on
average.
B)
A
person
with
no
years
of
education
is
paid
a
wage
of
$3
on
average.
C)
A
person
with
16
years
of
education
is
paid
a
wage
of
$27
on
average
D)
A
1.5
year
increase
in
education
raises
the
wage
by
$1
on
average
E)
A
person
with
12
years
of
education
is
paid
a
wage
of
$21
on
average.
3)
Suppose
we
set
up
the
following
hypothesis
test
framework
about
the
mean
of
a
population
that
is
normally
distributed:
H0:
=0
H1:
<0
A
random
sample
is
collected
and
the
sample
mean
is
found
to
be
1.5.
Which
of
the
following
statements
is
TRUE?
I.
We
will
reject
the
null
in
favour
of
the
alternative
if
the
standard
error
is
sufficiently
small.
II.
We
will
accept
the
null
regardless
of
the
size
of
the
standard
error.
III.
We
will
fail
to
reject
the
null
regardless
of
the
size
of
the
standard
error.
A)
I
only.
B)
II
only.
C)
III
only.
D)
II
and
III
only.
E)
None
of
the
above
statements
is
true.
4)
Let
X
be
a
random
variable
such
that
X~N(3,5).
Let
Y=-2X-3.
How
is
Y
distributed?
A)
Y~N(-9,5)
B)
Y~N(-6,5)
C)
Y~N(-3,
20)
D)
Y~N(-9,
20)
E)
We
dont
have
enough
information
to
say.
c)
3
points
Suppose
you
conduct
the
hypothesis
test
at
the
5%
significance
level.
What
is
(are)
the
critical
value(s)
of
t
against
which
you
will
compare
your
t-statistic?
d)
3
points
Do
you
reject
the
null
hypothesis
at
the
5%
significance
level?
Explain
briefly.
e)
4
points
Draw
the
t-distribution
under
the
null
(that
is,
assuming
the
null
is
true).
In
your
drawing,
be
sure
to
label
with
numbers
the
mean
value
of
t
under
the
null,
the
edge(s)
of
the
rejection
region(s),
and
the
t-statistic
youve
calculated.
f)
5
points
Now
calculate
a
95%
confidence
interval
around
the
sample
mean.
g)
4
points
Is
the
null
contained
in
your
confidence
interval?
Does
the
answer
to
this
seem
inconsistent
with
the
answer
to
question
d?
If
so,
can
you
reconcile
the
results?
END
SECTION
3.
END
OF
EXAM.
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