An analyst studies quarterly data on the relationship between retail sales (y, in $ millions), gross national product (x, in $ billions), and a quarterly dummy d that equals 1 if the sales are for the 4th quarter, 0 otherwise He estimates the model y 0 1 x 2 d 3 xd Relevant regression results are shown in the accompanying table a Interpret the dummy variable, d Is it significant at the 5 level b Interpret the interaction variable Is it significant at the 5 level p Value Coefficients Standard Error 186553 3 t Stat 0 002 3 31 Intercept 56421 1 12 08 55 0 4 6 0 000 0 342 112605 8 117053 0 0 96 4 7 9 3 0 618 0 50 xd

Question: An analyst studies quarterly data on the relationship between retail sales (y, in $ millions), gross national product (x, in $ billions), and a quarterly

An analyst studies quarterly data on the relationship between retail sales (y, in $ millions), gross national product (x, in $ billions), and a quarterly dummy d that equals 1 if the sales are for the 4th quarter, 0 otherwise. He estimates the model y = ?₀ + ?₁x + ?₂d + ?₃xd + ?. Relevant regression results are shown in the accompanying table.

p-Value Coefficients Standard Error 186553.3 t Stat 0.002 3.31 Intercept 56421.1 12.08

a. Interpret the dummy variable, d. Is it significant at the 5% level?

b. Interpret the interaction variable. Is it significant at the 5% level?

p-Value Coefficients Standard Error 186553.3 t Stat 0.002 3.31 Intercept 56421.1 12.08 55.0 4.6 0.000 0.342 112605.8 117053.0 0.96 -4.7 9.3 0.618 -0.50 xd

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