THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 152

Essay

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
An economist is in the process of developing a model to predict the price of gold.She believes that the two most important variables are the price of a barrel of oil (x₁)and the interest rate (x₂).She proposes the model y = β₀ + β₁x₁ + β₂x₂ + β₃x₁x₃ + ε.A random sample of 20 daily observations was taken.The computer output is shown below.
THE REGRESSION EQUATION IS
y = 115.6 + 22.3x₁ + 14.7x₂ - 1.36x₁x₂

S = 20.9 R-Sq = 55.4%
ANALYSIS OF VARIANCE

-Suppose that a regression relationship is given by Y = β₀ + β₁X₁ + β₂X₂ + ε.If the simple linear regression of Y on X₁ is estimated from a sample of n observations,the resulting slope estimate will generally be biased for β₁.But if the sample correlation between X₁ and X₂ is 0,the slope will not be biased for β₁.
How does X₂ affect β₁ if the sample correlation between X₁ and X₂ is zero?

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Definitions:

Medication

Substances used to treat or prevent disease or relieve pain, prescribed or available over-the-counter.

Extremely Restless

Describes a state of being unable to stay still or calm due to anxiety or boredom.

Narcolepsy

A chronic sleep disorder that causes overwhelming daytime drowsiness and sudden attacks of sleep.

Loses Appetite

The reduction or loss of desire to eat, which can be caused by psychological factors, illness, or other conditions.