Exercise 17-43 Static An analyst studies quarterly data on the relationship between retail sales (y, in $ millions), gross national product (x, in $ billions), and a quarterly dummy d that equals 1 if the sales are for the 4th quarter, 0 otherwise. He estimates the model y = 60 + 61x + 62d + 63xd + E. Relevant regression results are shown in the accompanying table. Coefficients Standard Error t Stat p-value Intercept 186553.3 56421. 1 3. 31 0. 002 55.0 4.6 12 . 08 0.000 d 112605.8 117053.0 0.96 0. 342 x -4.7 9 . 3 -0. 50 0. 618 a-1. Interpret the dummy variable, d. At x = 0, predicted 4th quarter sales are greater than other quarters by about $112,605.80 million. At x= 0, predicted 4th quarter sales are greater than other quarters by about $186,553.30 million. At x = 0, predicted 4th quarter sales are greater than other quarters by about $299,159.10 million. At x= 0, predicted 4th quarter sales are less than other quarters by about $186,553.30 million. a-2. Is the dummy variable d significant at the 5% level? e to search O m Oo 20 61OF ~ 0 # 4 X FT . & 3 7 E R T D F G H K B N Ma-2. Is the dummy variable d significant at the 5% level? Yes, since we reject the relevant null hypothesis. Yes, since we do not reject the relevant null hypothesis. O No, since we reject the relevant null hypothesis. O No, since we do not reject the relevant null hypothesis. b-1. Interpret the interaction variable. Predicted increase in sales due to a $1 billion dollar increase in GNP is about $4.7 million lower in the 4th quarter than in other quarters. Predicted increase in sales due to a $1 billion dollar increase in GNP is about $4.7 million higher in the 4th quarter than in other quarters. Predicted increase in sales due to a $1 billion dollar increase in GNP is about $51.3 million lower in the 4th quarter than in other quarters. Predicted increase in sales due to a $1 billion dollar increase in GNP is about $51.3 million higher in the 4th quarter than in other quarters.