Suppose That You Are Performing the RESET Test for the Inclusion

Multiple Choice

Suppose that you are performing the RESET test for the inclusion of higher-order polynomials and that in the second stage you estimate the sample regression function and the predicted value terms are statistically significant.You decide that

A) higher-order polynomials are not necessary for this regression.
B) you should investigate the inclusion of higher-order polynomials in your regression model.
C) neither regression model is appropriate.
D) higher-order polynomials are never appropriate to include in regression models.