The fitted values from a multivariate regression Y₀= β₀+ β₁X_i+ β₂Dummy + β₃Dummy*X_i will be A) Two parallel lines with a slope of B₂ and separated by β₁. B) Two parallel lines with a slope of β₁ and separated by β₂. C) Two lines with slopes of β₁ and β₁+ β₃ separated by β₂. D) Two lines with slopes of β₁and β₁+ β₃

Question

Quizplus · Accepted Answer

The model includes an interaction term (β13Dummy*Xi), which means the slopes of the lines for different values of the Dummy variable will be different. The slope for the line when Dummy=0 is β11, and when Dummy=1, it's β11 + β13, indicating two lines with different slopes based on the presence of the Dummy variable.

The Fitted Values from a Multivariate Regression Y0 = β0

The Fitted Values from a Multivariate Regression Y₀= β₀