Instruction 14-5
a Local Store Developed a Multiplicative Time-Series Model $\hat { Y }$

question 127

Multiple Choice

Instruction 14-5
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 2005 to 2009.The following is the resulting regression equation:
log 10 $\hat { Y }$ = 6.102 + 0.012 X - 0.129 Q₁ - 0.054 Q₂ + 0.098 Q₃
Where
$\hat { Y }$ is the estimated number of contracts in a quarter
X is the coded quarterly value with X = 0 in the first quarter of 2005.
Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
Q₃ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Instruction 14-5,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?

• A)The quarterly growth rate in revenues is significantly different than 0% (? = 0.05).
• B)The quarterly growth rate in revenues is not significantly different than 1.2% (? = 0.05).
• C)The quarterly growth rate in revenues is not significantly different than 0% (? = 0.05).
• D)The quarterly growth rate in revenues is significantly different than 1.2% (? = 0.05).

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Definitions:

Reallocation

denotes the process of distributing or assigning resources, roles, or tasks differently in response to changes in conditions, preferences, or objectives.

Demand for Land

The demand for land refers to the desire, backed by purchasing power, for the use of land resources for residential, commercial, or agricultural purposes.

Perfectly Elastic

Describes a situation in which the quantity demanded or supplied changes infinitely with even the smallest change in price.

Perfectly Inelastic

A situation where the demand or supply for a good does not change in response to changes in price.