Question 1

The upward or downward movement that characterizes a time series over a period of time is referred to as ____.
A)seasonal
B)cyclical
C)trend
D)irregular

Accepted Answer

The movement that takes place over a period of time is referred to as a trend. The other options are:
A) seasonal - refers to regular fluctuations in a time series that occur due to seasonal factors
B) cyclical - refers to fluctuations in a time series that occur due to economic cycles
D) irregular - refers to random fluctuations or unpredictable occurrences in a time series.

Question 2

A forecasting method that weights recent observations more heavily is called ____.
A)time series analysis
B)first-order autocorrelation
C)multiplicative decomposition
D)exponential smoothing

Accepted Answer

Exponential smoothing is a forecasting method that weights recent observations more heavily. This is done by giving more weight to the most recent observations and less weight to older observations.

Question 3

The purpose behind moving averages and centered moving averages is to eliminate _________________.
A)constant variation
B)cyclical variation
C)seasonal variation
D)regular variation

Accepted Answer

Moving averages and centered moving averages are used to eliminate seasonal variation, which is a type of fluctuation that occurs in a predictable pattern over time. By taking the average of several values, these methods can smooth out the seasonal component and allow for a clearer understanding of the underlying trend in the data. They are less effective at removing other types of variation such as cyclical and irregular fluctuations.

Question 4

The basic difference between MAD and MSE is that MSE,unlike MAD,penalizes a forecasting technique much more for _____ errors than for _____ errors.
A)large,small
B)small,large
C)small,zero
D)zero,large

Accepted Answer

MSE is calculated by squaring the errors, which means that larger errors will have a greater impact on the overall value of the MSE. This is in contrast to MAD, which takes the absolute value of the errors and treats all errors equally regardless of their size. Therefore, MSE penalizes a forecasting technique much more for large errors than for small errors.

Question 5

_______________ index is most useful if the base quantities provide a reasonable representation of consumption patterns in succeeding time periods.
A)Paasche
B)Weighted aggregate
C)Laspeyres
D)Cyclical (seasonal)

Accepted Answer

The Laspeyres index is most useful when the base quantities provide a reasonable representation of consumption patterns in succeeding time periods, as it uses a fixed basket of goods from the base period to measure price changes over time.

Question 6

A positive autocorrelation implies that negative error terms will be followed by _________ error terms.
A)negative
B)positive
C)either negative or positive
D)irregular

Accepted Answer

A positive autocorrelation implies that negative error terms will be followed by negative error terms and positive error terms will be followed by positive error terms.

Question 7

If a time series exhibits increasing seasonal variation,one approach is to first use a ______________ transformation that produces a transformed time series that exhibits constant seasonal variation.Then,_________ variables can be used to model the time series with constant seasonal variation.
A)autocorrelation,dummy
B)fractional power,dummy
C)fractional power,constant
D)autocorrelation,constant

Accepted Answer

A fractional power transformation, such as a logarithm, can stabilize increasing seasonal variation, and dummy variables can then be used to model the constant seasonal variation.

Question 8

When preparing a price index based on multiple products,if the price of each product is weighted by the quantity of the product purchased in a given period of time,the resulting index is called ___________ price index.
A)Paasche
B)Weighted aggregate
C)Laspeyres
D)Cyclical (seasonal)

Accepted Answer

A price index that is weighted by the quantity of the product purchased in a given period of time is called a weighted aggregate price index. The Paasche index is also weighted, but it uses current quantities rather than base period quantities, while the Laspeyres index uses base period quantities. A cyclical (seasonal) index pertains to changes in prices due to seasonal or cyclical patterns, rather than overall price changes. Therefore, the best choice is B.

Question 9

In the multiplicative decomposition method,the centered moving averages provide an estimate of trend x _____.
A)index
B)cycle
C)seasonal
D)irregular

Accepted Answer

The centered moving averages provide an estimate of the cycle component in the multiplicative decomposition method. The trend component is estimated using a simple moving average, while the seasonal component is estimated using seasonal indices. The irregular component represents the random fluctuations that cannot be attributed to any of the other components.

Question 10

The Laspeyres index and the Paasche index are both examples of _________ aggregate price indexes.
A)irregular
B)cyclical
C)trend
D)weighted

Accepted Answer

Both Laspeyres and Paasche indexes are examples of weighted aggregate price indexes, which take into account the relative importance or weight of each item in the index.

Question 11

The _____ test is a test for first-order positive autocorrelation.
A)Durbin-Watson
B)MSD
C)MAD
D)Multiplicative Winters

Accepted Answer

The Durbin-Watson test is specifically designed to test for first-order positive autocorrelation, making it the best choice for this scenario. The other options, MSD, MAD, and Multiplicative Winters, are not tests for autocorrelation.

Question 12

A simple index is computed by using the values of one time series,while the _______ index is based on a "market basket" consisting of more than one time series.
A)weighted
B)aggregate
C)cyclical
D)trend

Accepted Answer

An aggregate index is based on a "market basket" consisting of more than one time series. A weighted index also uses multiple time series, but each series is given a different weight or importance in the overall calculation. A cyclical index focuses on identifying trends and patterns in economic cycles, while a trend index tracks the overall direction of a single time series over time.

Question 13

Holt - Winters double exponential smoothing method is used to forecast time series data with ________.
A)autocorrelation
B)linear trend
C)cyclical patterns
D)moving averages

Accepted Answer

Holt-Winters double exponential smoothing method is best used for time series data with a linear trend. It models the trend component and the level component separately, making it appropriate for linear trends in the data. It may not be the best option for data with autocorrelation, cyclical patterns or moving averages.

Question 14

The Durbin-Watson statistic is used to detect ____.
A)first-order autocorrelation
B)exponential smoothing
C)multiplicative decomposing
D)irregular variation

Accepted Answer

The Durbin-Watson statistic is a test for first-order autocorrelation, which is the correlation between successive observations in a time series.

Question 15

When deseasonalizing time series observation,we divide the actual time series observation by its __________.
A)irregular factor
B)cyclical factor
C)seasonal factor
D)weighted aggregate factor

Accepted Answer

To deseasonalize a time series observation, it is divided by its seasonal factor, which accounts for the regular seasonal pattern in the data. This factor is obtained by averaging the values for each season across multiple years, and dividing the actual observation in each season by the average value for that season. This removes the seasonal component from the data, allowing for easier analysis of underlying trends and patterns. The other factors listed (irregular, cyclical, and weighted aggregate) are also important in time series analysis, but are not used specifically for deseasonalizing the data.

Question 16

Weighting in exponential smoothing is accomplished by the use of ____.
A)first-order autocorrelation
B)smoothing constants
C)Durbin-Watson
D)multiplicative decomposing

Accepted Answer

Weighting in exponential smoothing is accomplished by the use of smoothing constants, which determine the weight given to the past observations in making the forecast. Different types of exponential smoothing (e.g. simple, double, triple) use different smoothing constants.

Question 17

A simple index is obtained by dividing the current value of a time series by the value of a time series in the _____ time period and by multiplying this ratio by 100.
A)base
B)final
C)current
D)shortest

Accepted Answer

In a simple index, the value of a time series in a base time period is used as the reference point to calculate the index values for all other time periods. This is done by dividing the current value of the time series by the value of the time series in the base time period and multiplying the ratio by 100. Therefore, the best choice is A, or base.

Question 18

Periodic patterns in time series that repeat themselves within a calendar year or less are referred to as ____.
A)constant variations
B)cyclical variations
C)seasonal variations
D)regular variations

Accepted Answer

Periodic patterns that repeat within a calendar year or less are referred to as seasonal variations. Option A, constant variations, implies that the time series is stationary and does not change over time. Option B, cyclical variations, refers to patterns that last longer than a year and may not repeat in the same way every year. Option D, regular variations, does not provide any information about the pattern of the time series.

Question 19

When using simple exponential smoothing,the more recent the time series observation,the _________ its corresponding weight.
A)larger
B)smaller
C)irregular
D)cyclical

Accepted Answer

In simple exponential smoothing, more recent observations are given larger weights to reflect their greater relevance in predicting future values.

Question 20

The recurring up-and-down movement of a time series around trend levels that last more than one calendar year is called ____.
A)constant variation
B)cyclical variation
C)seasonal variation
D)irregular variation

Accepted Answer

Cyclical variation refers to the movement of a time series around trend levels that last more than one calendar year. Constant variation refers to the variability of a time series around its mean or trend, regardless of the time period. Seasonal variation is a pattern of a time series that repeats itself at regular intervals within a calendar year. Irregular variation refers to the unpredictable and random fluctuations of a time series that cannot be explained by its trend, seasonal, or cyclical components.

Quiz 16: Time Series Forecasting

The upward or downward movement that characterizes a time series over a period of time is referred to as ____.

A forecasting method that weights recent observations more heavily is called ____.

The purpose behind moving averages and centered moving averages is to eliminate _________________.

The basic difference between MAD and MSE is that MSE,unlike MAD,penalizes a forecasting technique much more for _ errors than for _ errors.

_______________ index is most useful if the base quantities provide a reasonable representation of consumption patterns in succeeding time periods.

A positive autocorrelation implies that negative error terms will be followed by _________ error terms.

If a time series exhibits increasing seasonal variation,one approach is to first use a ______ transformation that produces a transformed time series that exhibits constant seasonal variation.Then,_ variables can be used to model the time series with constant seasonal variation.

When preparing a price index based on multiple products,if the price of each product is weighted by the quantity of the product purchased in a given period of time,the resulting index is called ___________ price index.

In the multiplicative decomposition method,the centered moving averages provide an estimate of trend x _____.

The Laspeyres index and the Paasche index are both examples of _________ aggregate price indexes.

The _____ test is a test for first-order positive autocorrelation.

A simple index is computed by using the values of one time series,while the _______ index is based on a "market basket" consisting of more than one time series.

Holt - Winters double exponential smoothing method is used to forecast time series data with ________.

The Durbin-Watson statistic is used to detect ____.

When deseasonalizing time series observation,we divide the actual time series observation by its __________.

Weighting in exponential smoothing is accomplished by the use of ____.

A simple index is obtained by dividing the current value of a time series by the value of a time series in the _____ time period and by multiplying this ratio by 100.

Periodic patterns in time series that repeat themselves within a calendar year or less are referred to as ____.

When using simple exponential smoothing,the more recent the time series observation,the _________ its corresponding weight.

The recurring up-and-down movement of a time series around trend levels that last more than one calendar year is called ____.