THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 158

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
A loan officer is interested in examining the determinants of the total dollar value of residential loans made during a month.She used Y = β₀ + β₁X₁ + β₂X₂ + β₃X₃ + β₄X₄ + ε to model the relationship,where Y is the total dollar value of residential loans in a month (in millions of dollars) ,X₁ is the number of loans,X₂ is the interest rate,X₃ is the dollar value of expenditures of the bank on advertising (in thousands of dollars) ,and X₄ is a dummy variable equal to 1 if the observation is either June,July,or August.
-Suppose that she obtained = 3.8 + 0.23x₁ - 1.31x₂ + 0.032x₃ + 1.05x₄ - 0.22x₃x₄ by using data from the past 24 months.How would we interpret the coefficient of x₃x₄?

• A)On an average,we would expect $220,000 less in loans during the months of June,July,and August.
• B)Advertising is more effective during June,July,and August.
• C)Advertising is less effective in June,July,and August.
• D)On an average,we would expect $220,000 more in loans during the months of June,July,and August.

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Definitions:

Jung

Carl Jung was a Swiss psychiatrist and psychoanalyst who founded analytical psychology, emphasizing the importance of the individual psyche and the personal quest for wholeness.

Introvert

A person predominantly concerned with their own thoughts and feelings rather than with external things.

Compensation

A system of rewards or payments, or the psychological mechanism of balancing perceived weaknesses or deficiencies.

Adler

An early 20th-century psychologist known for his theories on individual psychology, emphasizing the importance of feelings of inferiority and the striving for superiority.