In the regression model Yi = 0 + 1Xi + 2Di + 3(Xi Di) + ui, ...

[darbym82]

In the regression model Yi = 0 + 1Xi + 2Di + 3(Xi  Di) + ui, where X is a continuous variable and D is a binary variable, 2
 
  A) is the difference in means in Y between the two categories.
  B) indicates the difference in the intercepts of the two regressions.
  C) is usually positive.
  D) indicates the difference in the slopes of the two regressions.

Question 2

The main advantage of using panel data over cross sectional data is that it
 
  A) gives you more observations.
  B) allows you to analyze behavior across time but not across entities.
  C) allows you to control for some types of omitted variables without actually observing them.
  D) allows you to look up critical values in the standard normal distribution.

[ririgirl15]

Answer to Question 1

Answer: B

Answer to Question 2

Answer: C