Refer to the Following:
a Forecaster Used the Regression Equation $Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$

question 48

Multiple Choice

Refer to the following:
A forecaster used the regression equation
$Q _ { t } = a + b t + c _ { 1 } D _ { 1 } + c _ { 2 } D _ { 2 } + c _ { 3 } D _ { 3 }$
and quarterly sales data for 1996I-2013IV (t = 1, ..., 64) for an appliance manufacturer to obtain the results shown below. Q is quarterly sales, and
$D _ { 1 } , D _ { 2 }$ and
$D _ { 3 }$ are dummy variables for quarters I, II, and III.
$$\begin{array} { | l l l l l l } \hline \text { DEPENDENTVARIAELE: } & \text { aT } & \text { R-SQUARE } & \text { F-RATIO } & \text { P-VALUE ON F } \\\text { OESERVATIONS: } & 64 & \text { 0.8768 } & 107.982 & 0.0001 & \\& & \text { PARAMETER } & \text { STANDARD } & & \\\text { VARIAELE } & & \text { ESTIMATE } & \text { ERROR } & \text { T-RATIO } & \text { P-VALUE } \\\text { INTERCEPT } & & 30.0 & 12.8 & 2.34 & 0.0224 \\\text { T } & & 1.5 & 0.70 & 2.14 & 0.0362 \\\text { D1 } & & 10.0 & 3.0 & 3.33 & 0.0015 \\\text { D2 } & & 25.0 & 7.2 & 3.47 & 0.0010 \\\text { D3 } & & 40.0 & 15.8 & 2.53 & 0.0140 \\\hline\end{array}$$
-In any given year, quarterly sales tend to vary as follows:

• A) Q_I > Q_II > Q_III > Q_IV
• B) Q_I > Q_II > Q_IV > Q_III
• C) Q_II > Q_III > Q_IV > Q_I
• D) Q_III > Q_II > Q_I > Q_IV
• E) Q_III > Q_IV > Q_II > Q_I

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Definitions:

Agricultural Products

Goods derived from farming and agriculture, including crops, livestock, and other raw materials.

Demand Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating consumers' sensitivity to price changes.

Farm Production

The process and output involved in the cultivation of crops and the rearing of livestock for economic purposes.

Conservation Reserve Program

A land conservation program initiated by the U.S. government to improve water quality, prevent soil erosion, and enhance habitats for endangered and threatened species.