Solved: Suppose the reset test rejects its null hypothesis what, Basic Statistics

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Suppose the reset test rejects its null hypothesis what

Suppose the RESET test rejects its null hypothesis. What should you do?

-Work with the unrestricted model that was estimated for the RESET test.

-Search for appropriate nonlinear functions of the explanatory variables in the original model and add them as additional regressors.

-Add to the model the squares and cubes of all explanatory variables in the original model

-Continue with the original model you have

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Basic Statistics: Suppose the reset test rejects its null hypothesis what

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