SCENARIO 16-14 a Contractor Developed a Multiplicative Time-Series Model to Forecast the Forecast

question 31

Multiple Choice

SCENARIO 16-14
A contractor developed a multiplicative time-series model to forecast the number of contracts in future quarters,using quarterly data on number of contracts during the 3-year period from 2011 to 2013.The following is the resulting regression equation:
ln Y^ˆ = 3.37 + 0.117 X - 0.083 Q₁ + 1.28 Q₂ + 0.617 Q₃
where
Y^ˆ is the estimated number of contracts in a quarter.
X is the coded quarterly value with X = 0 in the first quarter of 2011.
Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
Q₃ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Scenario 16-14,the best interpretation of the coefficient of Q₃ (0.617) in the regression equation is:

• A)the number of contracts in the third quarter of a year is approximately 62% higher than the average over all 4 quarters.
• B)the number of contracts in the third quarter of a year is approximately 62% higher than it would be during the fourth quarter.
• C)the number of contracts in the third quarter of a year is approximately 314% higher than the average over all 4 quarters.
• D)the number of contracts in the third quarter of a year is approximately 314% higher than it would be during the fourth quarter.

---

Definitions:

Domestication

The process of adapting wild plants and animals for human use, such as for food, clothing, or companionship.

Pastoralism

A form of agriculture focused on the raising of livestock in pastoral, or grassy, regions.

Agriculture

The practice of cultivating the land, producing crops, and raising livestock for food, fiber, and other products.

Gini Index

A measure of the distribution of income across a population used to gauge economic inequality.