Given an Actual Demand of 105, a Previous Forecast Value

question 126

Multiple Choice

Given an actual demand of 105, a previous forecast value of 99, and an alpha of .3, the exponential smoothing forecast for the next period would be

• A) 94.6.
• B) 97.4.
• C) 100.8.
• D) 101.6.
• E) 103.0.

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Definitions:

Simple Money Multiplier

A formula that estimates the maximum amount of money that banking can generate with each dollar of reserves.

Required Reserve Ratio

The fraction of deposits that banks are required by law to keep on hand or with the central bank, rather than lend out.

Money-Creation Process

The mechanisms through which new money is produced and introduced into the economy, primarily conducted by central banks and commercial banks.

Government Securities

Financial instruments issued by the government to finance its expenditures, including bonds, bills, and notes.