Instruction 13-11 An Econometrician Is Interested in Evaluating the Relation of Demand

Multiple Choice

Instruction 13-11
An econometrician is interested in evaluating the relation of demand for building materials to mortgage rates in Sydney and Melbourne.He believes that the appropriate model is
Y = 10 + 5X₁ + 8X₂
where X₁ = mortgage rate in %
X₂ = 1 if Sydney,0 if Melbourne
Y = demand in $100 per capita
-Referring to Instruction 13-11,the fitted model for predicting demand in Sydney is ________.

A) 10 + 5X₁
B) 10 + 13X₁
C) 18 + 5X₁
D) 15 + 8X₂