Review Concept 5.1
Consider the regression model below and let $(X_i, Y_i)$, $i = 1, \dots, n$ be an i.i.d. set of observations.
Specify the order of the 3 steps required to test the null hypothesis that the slope coefficient $\beta_1$ equals zero? That is,
$Y_i = \beta_0 + \beta_1 X_i + u_i$
$H_0: \beta_1 = 0$
A. Compute the $t$-statistic, $t = \frac{\widehat{\beta_1} - 0}{SE(\widehat{\beta_1})}$.
B. Compute the $p$-value, $P_{r_{H_0}}(|t| > |t^{act}|)$.
C. Compute the standard error of the estimated slope coefficient $\widehat{\beta_1}$, $SE(\widehat{\beta_1}) = \sqrt{\frac{\widehat{\sigma^2}}{\widehat{\beta_1}}}$.
(Enter 1, 2 or 3 in each box)