10 pts.) A company developed the following regression model to forecast quarterl

Question

10 pts.) A company developed the following regression model to forecast quarterly prices of one of its major products for 2013 and 2014. P = a + bt + c1D1 + c2D2 + c3D3 + e. Where, P = price of the product, t is the trend variable, D1 is a dummy variable for quarter I, D2 is a dummy variable for quarter II, and D3 is a dummy for quarter III. In quarter I: D1 = 1, D2 = 0, and D3 = 0. In quarter II: D2 = 1, D1 = 0, and D3 = 0 In quarter III: D3 = 1, D1 = 0, and D2 = 0. The company estimated this model using 35 quarterly observations for the period 2004II

Explanation / Answer

State the null and alternative hypotheses.

H0:?Selectgreater than 2.357greater than or equal to 2.357equal to 2.357less than or equal to 2.357less than 2.357not equal to 2.357Item 1
Ha:?Selectgreater than 2.357greater than or equal to 2.357equal to 2.357less than or equal to 2.357less than 2.357not equal to 2.357Item 2

Compute the value of the test statistic (to 2 decimals).


Thep-value isSelectless than .01between .01 and .05between .05 and .10between .10 and .20between .20 and .40greater than .40Item 4

What is your conclusion?
SelectConclude the mean price of gasoline is different in the Lower Atlantic statesDo not conclude the mean price of gasoline is different in the Lower Atlantic statesItem 5

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