Which of the following models is assumed for a quarterly time series that seems to grow on average by an increasing amount (or decline by a decreasing amount)and seems to have seasonality? A) ln(y_t)= β₀ + β₁d₁ + β₂d₂ + β₃d₃ + β₄t + ε_t B) y_t = β₀ + β₁d₁ + β₂d₂ + β₃d₃ + β₄t + ε_t C) ln(y_t)= β₀ + β₁d₁ + β₂d₂ + β₃d₃ + β₄d₄ + β₅t + ε_t D) y_t = β₀ + β₁d₁ + β₂d₂ + β₃d₃ + β₄d₄ + β₅t + ε_t

Question

Quizplus · Accepted Answer

The model in choice A uses a logarithmic transformation, which is suitable for capturing exponential growth or decline, and includes seasonal dummy variables for quarterly data.

Which of the Following Models Is Assumed for a Quarterly