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Exhibit 17

question 9

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Exhibit 17.3.Consider the regression model, Humidity = β0 + β1Temperature + β2Spring + β3Summer + β4Fall + β5Rain + ε,
Where the dummy variables Spring,Summer,and Fall represent the qualitative variable Season (spring,summer,fall,winter) ,and the dummy variable Rain is defined as Rain = 1 if rainy day,Rain = 0 otherwise.
Refer to Exhibit 17.3.Assuming the same temperature and precipitation condition,what is the difference between the predicted humidity for summer and winter days?

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Definitions:

Utility Function

A mathematical representation that describes how consumers rank different bundles of goods according to their level of satisfaction or utility.

Consumption

The process by which goods and services are utilized by consumers, influencing economic activity and growth.

Income

The monetary payment received for one's work (wages), investments, or other sources such as pensions or government aid.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed on an annual basis, serving as a key parameter in financial transactions.

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