The Beachside Real Estate agency has developed an exponential time-series model to forecast the number of new building contracts in future quarters, using quarterly data on number of building contracts during the 3-year period from 2020 to 2022. The following is the resulting regression equation:

log₁₀ = 0.74 + 0.023X - 0.093Q1 + 1.346Q2 + 0.542Q3

Where

is the estimated number of building contracts in a quarter

X is the coded quarterly value with X = 0 in the first quarter of 2020

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

Using the above regression equation,

1. interpret from a practical point of view, the following values:

• the constant 0.74 in the regression equation.
• the coefficient of X (0.023) in the regression equation.
• the coefficient of Q2(1.346) in the regression equation.

1. estimate the forecast for the number of building contracts in the third quarter of 2023. Show your calculations.

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