For the model y = β₀ + β₁x + β₂xd + ε,what are the hypotheses for testing the individual significance of the interaction variable xd? A)H₀: xd = 0,H_A: xd ≠ 0 B)H₀: b₂ = 0,H_A: b₂ ≠ 0 C)H₀: β₂ = 0,H_A: β₂ ≠ 0 D)H₀: β₂ ≠ 0,H_A: β₂ = 0

Question

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The hypothesis for testing the individual significance of the interaction variable xd is that the coefficient β₂ equals zero (H₀: β₂ = 0) versus the alternative hypothesis that it is not equal to zero (H_A: β₂ ≠ 0). This is because we want to test if the interaction term xd is statistically significant in the regression model.

For the Model Y = β0 + β1x + β2xd

For the Model Y = β₀ + β₁x + β₂xd