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Silver Prices an Economist Is in the Process of Developing a Developing

Question 33

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Silver Prices
An economist is in the process of developing a model to predict the price of silver.She believes that the two most important variables are the price of a barrel of oil (x1)and the interest rate (x2).She proposes the first-order model with interaction: y = β0 + β1x1 + β2x2 + β3x1x3 + ε.A random sample of 20 daily observations was taken.The computer output is shown below. THE REGRESSION EQUATION IS y = 115.6 + 22.3x1 + 14.7x2− 1.36x1x2 Silver Prices An economist is in the process of developing a model to predict the price of silver.She believes that the two most important variables are the price of a barrel of oil (x<sub>1</sub>)and the interest rate (x<sub>2</sub>).She proposes the first-order model with interaction: y = β<sub>0</sub> + β<sub>1</sub>x<sub>1</sub> + β<sub>2</sub>x<sub>2</sub> + β<sub>3</sub>x<sub>1</sub>x<sub>3</sub> + ε.A random sample of 20 daily observations was taken.The computer output is shown below. THE REGRESSION EQUATION IS y = 115.6 + 22.3x<sub>1</sub> + 14.7x<sub>2</sub>− 1.36x<sub>1</sub>x<sub>2</sub> S = 20.9 R−Sq = 55.4% ANALYSIS OF VARIANCE ​ ​ -{Silver Prices Narrative} Interpret the coefficient b<sub>1</sub>. S = 20.9 R−Sq = 55.4% ANALYSIS OF VARIANCE Silver Prices An economist is in the process of developing a model to predict the price of silver.She believes that the two most important variables are the price of a barrel of oil (x<sub>1</sub>)and the interest rate (x<sub>2</sub>).She proposes the first-order model with interaction: y = β<sub>0</sub> + β<sub>1</sub>x<sub>1</sub> + β<sub>2</sub>x<sub>2</sub> + β<sub>3</sub>x<sub>1</sub>x<sub>3</sub> + ε.A random sample of 20 daily observations was taken.The computer output is shown below. THE REGRESSION EQUATION IS y = 115.6 + 22.3x<sub>1</sub> + 14.7x<sub>2</sub>− 1.36x<sub>1</sub>x<sub>2</sub> S = 20.9 R−Sq = 55.4% ANALYSIS OF VARIANCE ​ ​ -{Silver Prices Narrative} Interpret the coefficient b<sub>1</sub>. ​ ​
-{Silver Prices Narrative} Interpret the coefficient b1.

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b1 = 22.3; as the price of a ba...

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