Instruction 13 $$Y = 10 + 5 X _ { 1 } + 8 X _ { 2 }$$

question 44

Multiple Choice

Instruction 13.40
An econometrician is interested in evaluating the relation of demand for building materials to mortgage rates in Sydney and Melbourne. He believes that the appropriate model is
$$Y = 10 + 5 X _ { 1 } + 8 X _ { 2 }$$
where
$\begin{array} { l } x _ { 1 } = \text { mortgage rate in } \% \\x _ { 2 } = 1 \text { if Sydney, } 0 \text { if Melbourne } \\Y = \text { demand in } \$ 100 \text { per capita }\end{array}$
-Referring to Instruction 13.40,the fitted model for predicting demand in Sydney is ______.

• A) 10 + 5X 1
• B) 10 + 13X 1
• C) 18 + 5X 1
• D) 15 + 8X 2

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