A large "T-statistic" tell us that
A)a tiny change in the independent variable will cause a relatively large change in the dependent variable.
B)we do not have enough data to obtain an accurate regression line.
C)we can be confident that our estimated coefficient is not zero.
D)we should have included more "lags" in our model.
E) we have incorrectly switched the dependent and independent variables in our model.

Question

Quizplus · Accepted Answer

A large t-statistic indicates that the estimated coefficient of the independent variable is likely to be significantly different from zero, meaning that there is a strong relationship between the independent variable and dependent variable. Therefore, we can be confident that our estimated coefficient is not zero. Options A, B, D and E are incorrect as they do not relate to the interpretation of the t-statistic.

A Large "T-Statistic" Tell Us That