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In order to explain the US defense budget, you are using the data from 1962 to 1981 with the following variables (all measured in billions USD) and estimate the corresponding model (Model 1):(Use α=0.05 for references)

Yt: Defense budget outlay for year t
X2t: GNP for year t
X3t: US military sales in year t
X4t: Aerospace industry sales in year t
D1t: Dummy variable presenting the military conflict involving more than 100,000 troops; D1t=1 if more than 100,000 troops are involved and equal to 0 if fewer than 100,000 troops are involved.

|Dependent Variable: Y Sample: 1962 1981 |
|Method: Least Squares Included observations: 20 |
|Variable |Coefficient |Std. Error |t-Statistic |Prob. |
|C |21.40251 |1.496947 |14.29744 |0.0000 |
|D1 |-48.21987 |6.871544 |-7.017328 |0.0000 |
|X2 |0.013879 |0.003207 |4.328062 |0.0008 |
|X3 |0.073146 |0.203805 |0.358902 |0.7254 |
|X4 |1.389753 |0.130197 |10.67423 |0.0000 |
|X4*D1 |1.540792 |0.325005 |4.740818 |0.0004 |
|X2*D1 |0.022406 |0.005781 |3.876038 |0.0019 |
|R-squared |0.996366 | Mean dependent var |83.86000 |
|Adjusted R-squared |0.994688 | S.D. dependent var |28.97771 |
|S.E. of regression |2.111972 | Akaike

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