Question Details

Which of the following is likely that the best forecasting functional 



1. Emma uses a linear model to forecast quarterly same-store sales at the localGardenCenter.  The results of her multiple regression is:

Sales = 2,800 + 200•T - 350•D

	whereT 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 variable which is 1 if sales are in the cold and dreary first quarter, and zero otherwise, because the months of January, February, and March generate few sales at the GardenCenter.  Use this model to estimate sales in a store for the first quarter of 2010 in the 17th month; that is: {2010 I}. Emma- forecast should be:  
a.	5,950
b.	6,200
c.	6,350
d.	6,000
e.	5,850

	

2. 	Select the correct statement.
	a.	Qualitative forecasts give the direction of change.
	b.	Quantitative forecasts give the exact amount or exact percentage change.
	c.	Diffusion forecasts use the proportion of the forecasts that are positive to forecast up or down.
	d.	Surveys are a form of qualitative forecasting.
	e.	all of the above are correct.

		

3.	If two alternative economic models are offered, other things equal, we would
	a.	tend to pick the one with the lowest R2.
	b.	select the model that is the most expensive to estimate.
	c. 	pick the model that was the most complex.
	d.	select the model that gave the most accurate forecasts
	e.	all of the above

		

4.	Mr. Geppettouses exponential smoothing to predict revenue in his wood carving business. He uses a weight of  = .4 for the naïve forecast and (1-) = .6 for the past forecast.  What revenue did he predict for March using the data below?  Select closet answer.
	MONTH   REVENUE        FORECAST
	Nov	100			100
	Dec 	90			100
	Jan		115			----
Feb		110			----
	MARCH	 ?			?
a.	106.2
b.	104.7
c.	103.2
d.	102.1
e.	101.7
	

5.	Suppose a plot of sales data over time appears to follow an S-shape as illustrated below.

	Sales                              •
				•
					
						•
				•		
			•	•		

								Time

Which of the following is likely that the best forecasting functional form to use for sales data above?
a.	A linear trend, Sales = a + b T
b.	A quadratic shape in T, using T-squared as another variable, Sales = a + b T + cT2.
c.	A semi-log form as sales appear to be growing at a constant percentage rate, Ln Sales = a + bT
d.	A cubic shape in T, using T-squared and T-cubed as variables, Sales = a + b T + cT2 + d T3. 
e.	A quadratic shape in T and T-squared as variables, Sales = a + b T + cT2




Economics Assignment Help, Economics Homework help, Economics Study Help, Economics Course Help