Multiple Choice Quiz - Results

1. Incorrect. You answered: a. predicts the quality of a new product..

A qualitative forecast
The correct answer was: b. predicts the direction, but not the magnitude, of change in a
variable..
2. Incorrect. You did not provide an answer.
Which of the following is not a qualitative forecasting technique?
The correct answer was: d. Time-series analysis.
3. Incorrect. You did not provide an answer.
The first step in time-series analysis is to
The correct answer was: c. plot the data on a graph..
4. Incorrect. You did not provide an answer.
Forecasts are referred to as naive if they
The correct answer was: a. are based only on past values of the variable..
5. Incorrect. You did not provide an answer.
Time-series analysis is based on the assumption that
The correct answer was: c. past patterns in the variable to be forecast will continue unchanged
into the future..
6. Incorrect. You did not provide an answer.
Which of the following is not one of the four types of variation that is estimated in time-series
analysis?
The correct answer was: a. Predictable.
7. Incorrect. You did not provide an answer.
The cyclical component of time-series data is usually estimated using
The correct answer was: d. qualitative methods..
8. Incorrect. You did not provide an answer.
In time-series analysis, which source of variation can be estimated by the ratio-to-trend
method?
The correct answer was: c. Seasonal.
9. Incorrect. You did not provide an answer.
If regression analysis is used to estimate the linear relationship between the natural logarithm
of the variable to be forecast and time, then the slope estimate is equal to
The correct answer was: c. the natural logarithm of one plus the rate of growth..
10. Incorrect. You did not provide an answer.
The use of a smoothing technique is appropriate when
The correct answer was: a. random behavior is the primary source of variation..
11. Incorrect. You did not provide an answer.
The greatest smoothing effect is obtained by using
The correct answer was: b. exponential smoothing with a small weight value..
12. Incorrect. You did not provide an answer.
The root-mean-square error is a measure of
The correct answer was: d. forecast accuracy..
13. Incorrect. You did not provide an answer.
Barometric methods are used to forecast
The correct answer was: c. cyclical variation..
14. Incorrect. You did not provide an answer.
A leading indicator is a measure that usually
The correct answer was: c. changes in the same direction as the general economy before the
general economy changes..
15. Incorrect. You did not provide an answer.
If 3 of the leading indicators move up, 2 move down, and the remaining 6 are
constant, then the diffusion index is
The correct answer was: b. 3/11 = 27%.
16. Incorrect. You did not provide an answer.
A single-equation econometric model of the demand for a product is a ________ equation in
which the quantity demanded of the product is an ________ variable.
The correct answer was: b. structural, endogenous.
17. Incorrect. You did not provide an answer.
A reduced form equation expresses
The correct answer was: b. an endogenous variable as a function of exogenous variables..
18. Incorrect. You did not provide an answer.
Trend projection is an example of which kind of forecasting?
The correct answer was: b. Time-series.
19. Incorrect. You did not provide an answer.
Turning points in the level of economic activity can be forecast by using
The correct answer was: c. Barometric methods.
20. Incorrect. You did not provide an answer.
Econometric forecasts require
The correct answer was: d. all of the above..
True/False Quiz - Results
You answered 0 out of 40 questions correctly, for a score of 0%.
1. Incorrect. You did not provide an answer.
Forecasts of commodity demand may be based on macroeconomic forecasts.
The correct answer was: a. True.
2. Incorrect. You did not provide an answer.
Barometric forecasting methods are most useful for long-term forecasts.
The correct answer was: b. False.
3. Incorrect. You did not provide an answer.
The choice of a forecasting method should be based on an assessment of the costs and
benefits of each method in a specific application.
The correct answer was: a. True.
4. Incorrect. You did not provide an answer.
Surveys and opinion polls are qualitative techniques.
The correct answer was: a. True.
5. Incorrect. You did not provide an answer.
Qualitative forecasts based on surveys tend to perform particularly well during periods of
unexpected international political upheaval.
The correct answer was: b. False.
6. Incorrect. You did not provide an answer.
The Delphi method generates forecasts by surveying consumers to determine their opinions.
The correct answer was: b. False.
7. Incorrect. You did not provide an answer.
One advantage of the Delphi method is that it avoids a "bandwagon effect" that could lead to
incorrect or biased conclusions.
The correct answer was: a. True.
8. Incorrect. You did not provide an answer.
Councils of distinguished foreign dignitaries and business people are used to obtain qualitative
forecasts with a foreign perspective.
The correct answer was: a. True.
9. Incorrect. You did not provide an answer.
Time-series analysis generates forecasts by identifying cause and effect relationships between
variables.
The correct answer was: a. True.
10. Incorrect. You did not provide an answer.
Time-series data are observations on a variable at different points in time.
The correct answer was: a. True.
11. Incorrect. You did not provide an answer.
The fundamental assumption of time-series analysis is that past patterns in time-series data
will continue unchanged in the future.
The correct answer was: a. True.
12. Incorrect. You did not provide an answer.
Time-series forecasting tends to be more accurate than "naive" forecasting.
The correct answer was: b. False.
13. Incorrect. You did not provide an answer.
The long-run increase or decrease in time-series data is referred to as a cyclical fluctuation.
The correct answer was: b. False.
14. Incorrect. You did not provide an answer.
A time series that displays regular seasonal variation is said to exhibit cyclical fluctuation.
The correct answer was: b. False.
15. Incorrect. You did not provide an answer.
Irregular or random influences on time-series data give rise to the secular trend.
The correct answer was: b. False.
16. Incorrect. You did not provide an answer.
Expansions and contractions in the general economy result in seasonal variation.
The correct answer was: b. False.
17. Incorrect. You did not provide an answer.
Cyclical fluctuations in time-series data are generally forecast using qualitative techniques.
The correct answer was: a. True.
18. Incorrect. You did not provide an answer.
The use of a linear trend equation to forecast future values of a variable is based on the
assumption of a constant amount of change per time period.
The correct answer was: a. True.
19. Incorrect. You answered: b. False.
The linear trend equation can be estimated by ordinary least squares regression analysis.
The correct answer was: a. True.
20. Incorrect. You did not provide an answer.
The constant percentage growth rate model cannot be estimated by ordinary least squares
regression analysis.
The correct answer was: b. False.
21. Incorrect. You did not provide an answer.
Seasonal variation can be estimated by the use of dummy variables in linear regression
analysis.
The correct answer was: a. True.
22. Incorrect. You did not provide an answer.
The ratio-to-trend method is used to estimate a linear trend equation.
The correct answer was: b. False.
23. Incorrect. You did not provide an answer.
A fundamental assumption of time-series analysis is that past trend and seasonal patterns will
not persist in the future.
The correct answer was: b. False.
24. Incorrect. You did not provide an answer.
Time-series analysis is particularly useful for forecasting turning points in time-series data.
The correct answer was: b. False.
25. Incorrect. You did not provide an answer.
Naive forecasting methods include time-series analysis and smoothing methods.
The correct answer was: a. True.
26. Incorrect. You did not provide an answer.
Smoothing techniques are most useful for time-series data that is primarily influenced by
irregular variation.
The correct answer was: a. True.
27. Incorrect. You did not provide an answer.
A moving average forecast is based on the most recent observed values of time-series data.
The correct answer was: a. True.
28. Incorrect. You did not provide an answer.
The greater the number of periods used to calculate a moving average, the more sensitive the
forecast is to the most recent observation.
The correct answer was: b. False.
29. Incorrect. You did not provide an answer.
In general, the greater the degree of irregular or random variation present in a time series,
the more periods should be used to calculate a moving average forecast.
The correct answer was: a. True.
30. Incorrect. You did not provide an answer.
If two forecasting methods are applied to the same data set, the method that yields the larger
root-mean-square error (RMSE) is better.
The correct answer was: b. False.
31. Incorrect. You did not provide an answer.
A forecast calculated using the exponential smoothing method is a weighted average of past
observations in which the most recent observation has the greatest weight.
The correct answer was: a. True.
32. Incorrect. You did not provide an answer.
The weight (w) that is used to calculate an exponential smoothing forecast defines the
contribution of the most recent observation to the forecast.
The correct answer was: a. True.
33. Incorrect. You did not provide an answer.
Barometric methods are often used to forecast the cyclical component of a time series.
The correct answer was: a. True.
34. Incorrect. You did not provide an answer.
The use of leading indicators to forecast time-series data is an example of econometric
forecasting.
The correct answer was: b. False.
35. Incorrect. You did not provide an answer.
The diffusion index is a coincident indicator.
The correct answer was: b. False.
36. Incorrect. You did not provide an answer.
The use of an estimated demand equation to forecast demand is an example of econometric
forecasting.
The correct answer was: a. True.
37. Incorrect. You did not provide an answer.
Forecasts based on leading indicators are qualitative.
The correct answer was: a. True.
38. .
Macroeconomic forecasts are generally based on multiple-equation econometric models.
True.
39. Reduced form equations are derived algebraically from the structural and definitional
equations in a multi-equation econometric model.
. True.
40. Definitional equations must be estimated using regression analysis.
False