In the regression equation = b₀ + b₁x + b₂dx with a dummy variable d,when d changes from 0 to 1,the change in the slope of the corresponding lines is given by: A)b₀ B)b₀ + b₁ C)b₂ D)b₀ + b₂

Question

Quizplus · Accepted Answer

A dummy variable is a binary variable that only takes two values 0 or 1. So, when d changes from 0 to 1, it means that it only affects the coefficient of the variable dx (interaction term). Therefore, the change in the slope of the corresponding lines is given by the coefficient of dx, which is b₂. Thus, the correct answer is C.

In the Regression Equation = B0 + B1x

In the Regression Equation = B₀ + B₁x