A forecaster used the regression equation and quarterly sales data for 1996I-2013IV t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and and are dummy variables for quarters I,II,and III. At the 5 percent level of significance,is there a statistically significant trend in sales? A)Yes,because 0.0362 0.01. C)Yes,because 0.700 0.05. D)Yes,because 2.14 0.05. E)both c and d

Question

A forecaster used the regression equation  and quarterly sales data for 1996I-2013IV t = 1,...,64)for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and  and  are dummy variables for quarters I,II,and III.  At the 5 percent level of significance,is there a statistically significant trend in sales?
A)Yes,because 0.0362 < 0.05. 
B)No,because 0.0362 > 0.01. 
C)Yes,because 0.700 > 0.05. 
D)Yes,because 2.14 >0.05. 
E)both c and d

Quizplus · Accepted Answer

The coefficient for the time trend variable (t) is 0.0362. The null hypothesis is that the coefficient is equal to zero (i.e. no trend in sales). The p-value for this coefficient is less than 0.05, which means we reject the null hypothesis and conclude that there is a statistically significant trend in sales.

A Forecaster Used the Regression Equation and Quarterly Sales