The Time-Series Multiplicative Model Is Used for Forecasting, Where $T _ { t } , C _ { t } , S _ { t }$

question 75

Multiple Choice

The time-series multiplicative model is used for forecasting, where $T _ { t } , C _ { t } , S _ { t }$ and $R _ { t }$ are respectively the trend, cyclical, seasonal and random variation components of the time series, and $y _ { t }$ is the value of the time series at time t. The following estimates are obtained: $\hat { T _ { 1 } }$ = 125, $\tilde { C } _ { t }$ = 1.03, $\hat { S } _ { t }$ = 1.02, $\hat { R } _ { t }$ = 0.97. The model will produce a forecast of:

• A) 122.659.
• B) 131.325.
• C) 118.980.
• D) 127.385.

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Definitions:

Marginal Tax Rate

The amount of tax paid on an additional dollar of income, which is typically a percentage that increases as income rises.

Horizontal Equity

The principle of tax fairness that states individuals with similar income and ability to pay should be taxed at the same rate.

Federal Income Tax

A tax levied by the federal government on the annual income of individuals, corporations, trusts, and other legal entities.

Regressive Tax

A tax system where the tax rate decreases as the taxable amount increases, imposing a heavier burden on lower-income individuals.