TABLE 16-11
Business Closures in Laramie, Wyoming from 1989 to 1994

question 147

True/False

TABLE 16-11
Business closures in Laramie, Wyoming from 1989 to 1994 were:
$$\begin{array} { l l } 1993 & 10 \\1994 & 11 \\1995 & 13 \\1996 & 19 \\1997 & 24 \\1998 & 35\end{array}$$ Microsoft Excel was used to fit both first-order and second-order autoregressive models, resulting in the following partial outputs:
SUMMARY OUTPUT-2nd Order
Model
$\begin{array}{lc} & \text { Coefficients } \\\text { Intercept } & -5.77 \\\text { XVariable 1 } & 0.80 \\\text { XVariable 2 } & 1.14\end{array}$

$\text {SUMMARY OUTPUT-1st Order}$
$\text {Model}$

$\begin{array}{ll} & \text { Coefficients } \\\text { Intercept } & -4.16\end{array}$

$\underline{\text {XVariable \(1 \quad 1.59\)}}$
-Referring to Table 16-11, the values of the MAD for the two models indicate that the first-order model should be used for forecasting.

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Definitions:

Aggregate Demand Curve

A graphical representation showing the total demand for all goods and services in an economy at different price levels.

Aggregate Supply Curve

A graphical representation that shows the total quantity of goods and services producers are willing to supply at different price levels in an economy.

Consumer Price Index

An index that looks at the weighted average prices of a collection of consumer products and services, like food, transportation, and healthcare, to gauge inflation.

Price Level

An overall average price for the complete array of goods and services in the economy.