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TABLE 16-13 A Local Store Developed a Multiplicative Time-Series Model to Forecast

question 8

Multiple Choice

TABLE 16-13
A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the 4-year period from 1998 to 2002. The following is the resulting regression equation:
log₁₀Y^{^}= 6.102 + 0.012 X - 0.129 Q₁- 0.054 Q₂+ 0.098 Q₃
where
Y^{^}is the estimated number of contracts in a quarter
X is the coded quarterly value with X = 0 in the first quarter of 1998.
Q₁is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
Q₂is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
Q₃is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Table 16-13, in testing the significance of the coefficient of X in the regression equation (0.012) which has a p-value of 0.0000. Which of the following is the best interpretation of this result?

Analyze the effects of intoxication on a person's ability to enter into a contract.

Understand the process and significance of disaffirmance in contract law.

Identify the legal outcomes and responsibilities following the disaffirmance of a contract.

Evaluate legal protections available to minors in contractual agreements.

Definitions:

Total Revenue

The complete amount of money received by a company for goods sold or services provided during a specific period.

Increasing-Cost Industry

An industry where the costs of production increase as output increases, often due to factors like resource depletion or higher input prices.

Long-Run Supply Curve

A curve showing the relationship between the price of a good and the quantity supplied over a period long enough for firms to enter or exit the market.

Perfectly Elastic

Refers to a situation in economic theory where a small change in price leads to an infinite quantity demanded or supplied.