Consider the following linear trend models estimated from 10 years of quarterly data with and without seasonal dummy variables d1, d2, and d3. Here, d1 = 1 for quarter 1, 0 otherwise; other dummy variables are defined similarly.Model 1: ŷ = 48.00 + 0.44tModel 2: ŷ = 48.00 + 0.46t − 0.38d1 − 0.42d2 − 0.12d3Use each model to make a forecast for y for the first and the fourth quarters of the 11th year.Note: Round your answers to 2 decimal places.Which is the preferred model for forecasting if, relative to Model 1, Model 2 has higher R2 but lower adjusted R2?

Model 1 : Y = 48 + 0.44t Model 2 : Y = 48 + 0.46t - 0.38d1 - 0.42d2 - 0.12d3 For quarter 1 :…

Answered: Consider the following linear trend…

Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)

6th Edition

ISBN:9781337111348

Author:Bruce Crauder, Benny Evans, Alan Noell

Publisher:Bruce Crauder, Benny Evans, Alan Noell

Chapter5: A Survey Of Other Common Functions

Section5.6: Higher-degree Polynomials And Rational Functions

Problem 1TU: The following fictitious table shows kryptonite price, in dollar per gram, t years after 2006. t=...

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Consider the following linear trend models estimated from 10 years of quarterly data with and without seasonal dummy variables d₁, d₂, and d₃. Here, d₁ = 1 for quarter 1, 0 otherwise; other dummy variables are defined similarly.

Model 1: ŷ = 48.00 + 0.44t

Model 2: ŷ = 48.00 + 0.46t − 0.38d₁− 0.42d₂ − 0.12d₃

Use each model to make a forecast for y for the first and the fourth quarters of the 11th year.

Note: Round your answers to 2 decimal places.
Which is the preferred model for forecasting if, relative to Model 1, Model 2 has higher R² but lower adjusted R²?

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