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Questions › GATE › GATE 2026 › Q52
2 marks, −0.667Econometrics › Dummy variables and functional forms › Log, quadratic and other functional formsEasyabout 1 min

GATE 2026 Question 52: Dummy variables and functional forms

The estimated energy demand is given in the Equation below, where, y^t\hat y_ty^​t​ is the estimated value of the log of energy demand at time ttt. The numbers in the parentheses are the values of the ttt-statistic of the corresponding coefficients.

y^t=1.24(10.73)+0.56(7.28)ln⁡(GDPt)−0.03(5.28)ln⁡(energy pricet)\hat y_t = \underset{(10.73)}{1.24} + \underset{(7.28)}{0.56}\ln(\text{GDP}_t) - \underset{(5.28)}{0.03}\ln(\text{energy price}_t)y^​t​=(10.73)1.24​+(7.28)0.56​ln(GDPt​)−(5.28)0.03​ln(energy pricet​)

Which one of the following statements is CORRECT?

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Plain-text version

The estimated energy demand is given in the Equation below, where, ŷₜ is the estimated value of the log of energy demand at time t. The numbers in the parentheses are the values of the t -statistic of the corresponding coefficients. ŷₜ = 1.24 + 0.56ln (GDPₜ) - 0.03ln (energy priceₜ) Which one of the following statements is CORRECT? (A) Demand for energy is price inelastic (B) Demand for energy is price elastic (C) Demand for energy is unit elastic (D) Sufficient information has not been provided to calculate price elasticity

Also written as: The estimated energy demand is given in the Equation below, where, y_hat_t is the estimated value of the log of energy demand at time t. The numbers in the parentheses are the values of the t -statistic of the corresponding coefficients. y_hat_t = 1.24 + 0.56ln (GDP_t) - 0.03ln (energy price_t) Which one of the following statements is CORRECT?

Dummy variables and functional forms has come up 20 times in 6 exams since 2011.

What this question tests

This question is on Log, quadratic and other functional forms, part of Dummy variables and functional forms in Econometrics.

Choosing and interpreting log-log, semi-log, quadratic and reciprocal specifications.

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