TABLE 14-13 An Econometrician Is Interested in Evaluating the Relationship of Demand

question 293

Multiple Choice

TABLE 14-13
An econometrician is interested in evaluating the relationship of demand for building materials to mortgage rates in Los Angeles and San Francisco. He believes that the appropriate model is
Y = 10 + 5X₁ + 8X₂
where X₁ = mortgage rate in %
X₂ = 1 if SF, 0 if LA
Y = demand in $100 per capita
-Referring to Table 14-13, the fitted model for predicting demand in Los Angeles is ________.

• A) 10 + 5X₁
• B) 10 + 13X₁
• C) 15 + 8X₂
• D) 18 + 5X₂