The following model was fitted to data from 28 countries in 1989 in order to explain the market value of their debt at that time:
$$
\begin{aligned}
& \hat{y}=77.2-\underset{(8.0)}{9.6 x_1}-\underset{(2.73)}{17.2 x_2}-\underset{(0.056)}{0.15 x_3}+\underset{(1.0)}{2.2 x_4} \\
& R^2=0.84
\end{aligned}
$$
$(8.0)$
(273)
$(0056)$
$(1.0)$
$$
R^2=0.84
$$
where
$$
\begin{aligned}
& y= \text { secondary market price, in dollars, in } 1989 \\
& \text { of } \$ 100 \text { of the country's debt } \\
& x_1= 1 \text { if U.S. bank regulators have mandated } \\
& \text { write-down for the country's assets on books } \\
& \text { of U.S. banks, } 0 \text { otherwise } \\
& x_2= 1 \text { if the country suspended interest payments } \\
& \text { in } 1989,2 \text { if the country suspended interest } \\
& \text { payments before } 1989 \text { and was still in suspension, } \\
& \text { and } 0 \text { otherwise } \\
& x_3= \text { debt-to-gross-national-product ratio } \\
& x_4= \text { rate of real gross national product growth, } \\
& 1980-1985
\end{aligned}
$$
The numbers below the coefficients are the coefficient standard errors.
a. Interpret the estimated coefficient on $x_1$.
b. Test the null hypothesis that, all else being equal, debt-to-gross-national-product ratio does not linearly influence the market value of a country's debt against the alternative that the higher this ratio, the lower the value of the debt.
c. Interpret the coefficient of determination.
d. The specification of the dummy variable $x_2$ is unorthodox. An alternative would be to replace $x_2$ by the pair of variables $\left(x_5, x_6\right)$, defined as follows:
$x_5=1$ if the country suspended interest payments in 1989, 0 otherwise
$x_6=1$ if the country suspended interest payments before 1989 and was still in suspension, 0 otherwise
Compare the implications of these two alternative specifications.