Question

a) Regress average test score (testscr) on average expenditure per student (expnstu) and report your results. Use heteroskedasticity-robust standard errors. b) Construct a 95% confidence interval for B1. c) Suppose you learned that test scores and expenditure per student were independent.Would you be surprised? Explain. d) Construct a 95% confidence interval for the predicted effect of increasing expenditure by $1000 per student. e) Test the null hypothesis that the predicted effect is 3 points against the alternative hypothesis that the predicted effect is different from 3 points.Hint: you can use your answer to part d).3 f) A local congressman claimed that increasing per-student expenditure by $1000 would increase average test scores by at least 3 points. Is the congressman's claim valid? Ex-plain.

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