Which One of the Following Statements About Forecasting Is FALSE

question 104

Multiple Choice

Which one of the following statements about forecasting is FALSE?

• A) The method for incorporating a trend in an exponentially smoothed forecast requires the estimation of three smoothing constants: one for the mean, one for the trend, and one for the error.
• B) The cumulative sum of forecast errors (CFE) is useful in measuring the bias in a forecast.
• C) The standard deviation and the mean absolute deviation measure the dispersion of forecast errors.
• D) A tracking signal is a measure that indicates whether a method of forecasting has any built-in biases over a period of time.

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Definitions:

Producer Surplus

The disparity between the price at which sellers are ready to offer a product and the price they actually get.

Price Floor

A government-imposed limit below which prices cannot fall, typically used to ensure that producers can cover their costs.

Market Price

The current price at which an asset or service can be bought or sold in a particular market.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or commodity, aimed at protecting consumers.