THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
A loan officer is interested in examining the determinants of the total dollar value of residential loans made during a month.The officer used lnY = β₀ + β₁lnX₁ + β₂lnX₂ + β₃lnX₃ + lnε to model the relationship,where Y is the total dollar value of residential loans in a month (in millions of dollars) ,X₁ is the number of loans,X₂ is the interest rate,and X₃ is the dollar value of expenditures of the bank on advertising (in thousands of dollars) .Using data from the past 24 months,she obtained ln
= 0.67 + 1.2 ln x₁ - 1.45 ln x₂ + 1.07 ln x₃.
-How would the officer interpret the coefficient on x₃?

A) As the total loan amount increases,the amount of advertising increases at an increasing rate.
B) As the amount of advertising increases,the total loan amount increases at an increasing rate.
C) As the amount of advertising increases,the total loan amount increases at a decreasing rate.
D) As the total loan amount increases,the amount of advertising increases at a decreasing rate.