Question: Dummy variables (5 points) Consider the model score = g + ostats + lhours + 61 hours X stars + u relating the score in

 Dummy variables (5 points) Consider the model score = g +

Dummy variables (5 points) Consider the model score = g + ostats + lhours + 61 hours X stars + u relating the score in the final exam in introductory econometrics (score) to the number of hours spent preparing for the final exam (hours) for 3rd year students. The dummy variable stats is equal to 1 for students who got an A+ in statistics in their 2nd yearr and it is equal to zero otherwise. Assuming that getting an A+ in statistics improves the performance in the econometrics final exam even for those who have not spent any time preparing for the econometrics final exam: a (1). What is the expected sign of 60'? b ('l)' What is the expected sign of 51 ? c (3). Which of the two lines in the figure below pertains to those students who got an A+ in statistics last year (blue/red)? Explain. To type faster: 0 Use betaO for g and beta1 for 31 0 Use deltaO for 60 and deltal for 51 score 0 hours

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