A manager at a local bank analyzed the relationship between monthly salary (y, in $) and length of service (x, measured in months) for 30 employees. She estimates the following model: Salary = β₀ + β₁Service + ε. The following table summarizes a portion of the regression results. Which of the hypotheses will determine whether the slope differs from zero? A) H₀: β₀ = 0; H_A: β₀ ≠ 0 B) H₀: β₁ = 0; H_A: β₁ ≠ 0 C) H₀: b₀ = 0; H_A: b₀ ≠ 0 D) H₀: b₁ = 0; H_A: b₁ ≠ 0

Question

Quizplus · Accepted Answer

The hypothesis that will determine whether the slope differs from zero is the null hypothesis that the slope coefficient (β₁) equals zero (H₁: β₁ = 0) versus the alternative hypothesis that it does not equal zero (H_A: β₁ ≠ 0). This is because the slope coefficient measures the change in salary for each unit increase in service, and if the slope is zero, there is no relationship between service and salary. Therefore, option B is the correct choice.

A Manager at a Local Bank Analyzed the Relationship Between