In the regression model Yi = β0 + β1Xi + β2Di + β3(Xi × Di) + ui, where X is a continuous variable and D is a binary variable, β3
A) indicates the slope of the regression when D=1.
B) has a standard error that is not normally distributed even in large samples since D is not a normally distributed variable.
C) indicates the difference in the slopes of the two regressions.
D) has no meaning since (Xi × Di) = 0 when Di = 0.
Ans: C) indicates the difference in the slopes of the two regressions.
You might also like to view...
In purchasing products A and B, a consumer is in equilibrium when:
A) MUa/Pa = MUb/Pb B) MUa/Pb = MUb/Pa C) MUa - MUb = Pa/Pb D) MUa × Pa = MUb × Pb
The Board of Governors of the Federal Reserve System is
A) elected by the member banks' presidents. B) appointed by the Secretary of the Treasury C) appointed by the state governors in each Federal Reserve district. D) appointed by the president of the United States and confirmed by the Senate.