The Estimated Regression Equation Is Y_t = 448 + 12t

question 23

Multiple Choice

The estimated regression equation is y_t = 448 + 12t + 18 Qtr1 - 26 Qtr2 + 3 Qtr3.The regression model has three quarterly binaries.The model was fitted to 12 periods of quarterly data starting with the first quarter) .Why is there no fourth quarterly binary for Qtr4?

• A) Because the researcher made a mistake (we need binaries for all four quarters)
• B) Because it is unnecessary (its value is implied by the other three binaries)
• C) Because the fourth quarter binary is assumed to be the same as the first quarter
• D) Because there is no seasonality in the fourth quarter in most time series

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Definitions:

Variable Costs

Costs that vary directly with the level of output or production volume, such as raw materials and labor expenses.

Total Revenue

The total income generated by a company from its sales of goods or services before any costs or expenses are deducted.

Variable Costs

Costs that fluctuate in proportion to the level of output or activity in a business, such as raw materials and labor expenses.

Total Revenue

The total amount of money received by a firm from sales of its products or services, before any expenses are subtracted.