# Assigment 2 Essay Example

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Week 3 Homework Assignment - Chapter 5 and Chapter 6 (24 points)

Student Name: ___________________________________________

Chapter 05: (12 points)

____ 1. The forecasting technique which attempts to forecast short-run changes and makes use of economic indicators known as leading, coincident or lagging indicators is known as: (1point)
a. econometric technique
b. time-series forecasting
c. opinion polling
d. barometric technique
e. judgment forecasting

____ 2. The variation in an economic time-series which is caused by major expansions or contractions usually of greater than a year in duration is known as: (1point)
a. secular trend
b. cyclical variation
c. seasonal effect
d. unpredictable random factor
e. none of the above

____ 3. The type of economic indicator that can best be used for business forecasting is the: (1point)
b. coincident indicator
c. lagging indicator
e. optimism/pessimism indicator

____ 4. Which of the following barometric indicators would be the most helpful for forecasting future sales for an industry? (1point)

a. lagging economic indicators.
c. coincident economic indicators.
d. wishful thinking
e. none of the above

____ 5. Examine the plot of data. (2 points)

It is likely that the best forecasting method for this plot would be:
a. a two-period moving average
b. a secular trend upward
c. a seasonal pattern that can be modeled using dummy variables or seasonal adjustments
d. a semi-log regression model
e. a cubic functional form

____ 6. Emma uses a linear model to forecast quarterly same-store sales at the local Garden Center. The results of her multiple regression is: (2 points)

Sales = 2,800 + 200 • T  350 • D

where T goes from 1 to 16 for each quarter of the year from the first quarter of 2006 ('06I) through the fourth quarter of 2009 ('09 IV). D is a dummy

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