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Economics - Coggle Diagram

- - - - E.g: Estimate the effect of income on spending: b₁ tells how much spending increases when income increases by 1 unit.
    - - t-test (for individual coefficients)
      - F-test (for overall model significance).
      - Null hypothesis: β₁ = 0 (no relationship)
        Alternative hypothesis: β₁ ≠ 0
        Example: If p-value < 0.05 → reject H₀ → the relationship is statistically significant.