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for that we use a test statistic that follows the t- distribution with degrees of freedom n-k, where nis the number of observations and k is the number of parameters estimated In this case n=10 and k=2. therefore d.f=8. the test statistic t is defined as,
as b=0 under null hypothesis and S.E. is the standard error of the estimated b...
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is the standard error of the estimated b.
The S.E of estimated b is given by
(to be remembered). This means that as standard error of estimated b is high the variation due to unexplained variation is relatively hgher as compared with the variation explained by explanatory variable. Thus significance of b will be less as t value will be small...
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