Question: A5 2. Consider the following regression model log (Y4) = Bo + BIXn + ByXia + B3 (Xn X X12) + BaXia + BoX3+ U.

2. Consider the following regression model log (Y4) = Bo + BIXn + ByXia + B3 (Xn X X12) + BaXia + BoX3+ U. where X, is a dummy variable, and the model satisfies the least-squares as- sumptions. Use either calculus or first differences to show that (a) AY/AXa = Y (B4 + 285X3). (Hint: log() + AV) - log(Y) ~ 4-) (b) Show that E(log(Y.)IXa, Xe = 1, Xa) - E(log(Y.)IXa, Xe - 0. X2) = B2 + B3Xa

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