If you reject the null hypothesis when performing a RESET test,what should you conclude?
A)at least one of the original coefficients is not equal to zero
B)the original model is incorrectly specified and can be improved upon
C)relevant variable are omitted and the coefficient estimates of included variables are biased
D)an incorrect functional form was used

Question

Quizplus · Accepted Answer

The RESET test is used to detect incorrect model specification, such as omitted variables or incorrect functional form. Rejecting the null hypothesis suggests that the model can be improved.

If You Reject the Null Hypothesis When Performing a RESET