In the regression model Yi = ?0 + ?1Xi + ?2Di + ?3(Xi × Di) + ui, where X is a continuous variable and D is a binary variable, ?2
A) is the difference in means in Y between the two categories.
B) indicates the difference in the intercepts of the two regressions.
C) is usually positive.
D) indicates the difference in the slopes of the two regressions.
Answer: B
Economics
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