A consulting firm estimates the following quarterly sales forecasting model: $Q _ { t } = a + b t + c D$ The equation is estimated using quarterly data from 20010I-2020III (t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise.
The results of the estimation are: Given the above,these estimates indicate that the second quarter change in sales is
A)22.5 units higher in the second quarter than in the other three quarters.
B)1.86 units higher in the second quarter than in the other three quarters.
C)2.00 units higher in the second quarter than in the other three quarters.
D)24.5 units higher in the second quarter than in the other three quarters.

Question

A consulting firm estimates the following quarterly sales forecasting model: $Q _ { t } = a + b t + c D$ The equation is estimated using quarterly data from 20010I-2020III (t = 1,...,43).The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise.
The results of the estimation are:  Given the above,these estimates indicate that the second quarter change in sales is
A)22.5 units higher in the second quarter than in the other three quarters. 
B)1.86 units higher in the second quarter than in the other three quarters. 
C)2.00 units higher in the second quarter than in the other three quarters. 
D)24.5 units higher in the second quarter than in the other three quarters.

Quizplus · Accepted Answer

The coefficient of D in the regression equation is 2.00. This means that on average, the sales increase by 2 units in the second quarter compared to the other three quarters. Therefore, the best choice is C.

A Consulting Firm Estimates the Following Quarterly Sales Forecasting Model Qt=a+bt+cDQ _ { t } = a + b t + c DQt​=a+bt+cD

A Consulting Firm Estimates the Following Quarterly Sales Forecasting Model $Q _ { t } = a + b t + c D$