In the regression model Yi = β0 + β1Xi + β2Di + β3(Xi × Di)+ ui,where X is a continuous variable and D is a binary variable,β2
A)is the difference in means in Y between the two categories.
B)indicates the difference in the intercepts of the two regressions.
C)is usually positive.
D)indicates the difference in the slopes of the two regressions.

Question

Quizplus · Accepted Answer

β2 represents the difference in intercepts between the two categories of the binary variable D when X is zero.

In the Regression Model Yi = β0 + β1Xi