Question

A researcher tests the null hypothesis H0: β1 = 0 against H1: β1 ≠ 0 at a significance level α = 0.05. A Type I error occurs if the researcher:

A Fails to reject H₀ when H₀ is false
B Rejects H₀ when H₀ is false
C Rejects H₀ when H₀ is actually true
D Reduces the sample size, causing variance expansion
E Sets the significance level α equal to 1 - β
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