In the model y = β₀ + β₁x + β₂d + β₃xd + ε,when d changes from 0 to 1 how does the intercept of the corresponding lines change? A) From b₀ to b₀ + b₁ B) From b₀ to b₀ + b₂ C) From b₀ to b₀ + b₃ D) From b₀ to b₀ + b₁ + b₂

Question

Quizplus · Accepted Answer

When d changes from 0 to 1, the coefficient of b₂ is added to the intercept, i.e., the intercept changes from b₀ to b₀ + b₂. The other coefficients (b₁ and b₃) are multiplied by 0 since the corresponding variables (x and xd) do not change. Therefore, the intercept only changes by the coefficient of b₂.

In the Model Y = β0 + β1x + β2d

In the Model Y = β₀ + β₁x + β₂d