Explain the Forecast Error, U_t+1, in Terms Of

question 64

Essay

Explain the forecast error, u_t+1, in terms of:
(1) Its equation (what it is equal to)
(2) How it is used
(3) Its accuracy

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Definitions:

Slope

A measure of the steepness or incline of a line, represented as the ratio of the vertical change to the horizontal change between two points on the line.

Vertical Axis

The vertical number line of a graph along which values of the y-variable are measured; also referred to as the y-axis.

Linear Relationship

The relationship between two variables in which the slope is constant and therefore is depicted on a graph by a curve that is a straight line.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a particular price over a specified period.