|Hypothesis 1:|The coefficient on GDP is negative.|
|Hypothesis 2:|The intercept term is equal to –4.|
|Hypothesis 3:|A 2.6% increase in the CPI will result in an increase in sales of more than 12.0%.|
|Hypothesis 4:|A 1% increase in industrial production will result in a 1% decrease in sales.|
Can someone explain why Hypotheses 1 is a one tailed test? i thought it would be = or =/ to negative so that would be a two tailed test?
A two-tailed test distinguishes three possibilities; think of it as the Goldilocks test:
- The value is too big
- The value is too small
- The value is just right
A one-tailed test distinguishes only two possibilities.
How many possibilities are there for Hypothesis 1?
Only two since positive and negative so it’s a 1 tailed test, that explanation helped a lot! Thanks!
Well . . . nonnegative (can’t forget about zero) and negative. But you definitely have the idea.
Good to hear.
My pleasure.