In the regression model Y B2X BaDBXi X Duis where X is a con

In the regression model Y B2X BaD+B(Xi X D)+uis where X is a continuous variable and D is a dummy variable, 4 (a) indicates the slope of the regression when D-1. (b) has a standard error that is not normally distributed even in large samples since D is not a normally distributed variable, (c) indicates the difference in the slopes of the two regressions. (d) has no meaning since (X, x D) = 0 when Di = 0.

Solution

Since B₄ is the slope coefficient of the product of a variable and a dummy variable, it indicates the difference in the slopes of the two regressions. Hence the correct answer is (C).