You Set Out to Forecast the Unemployment Rate in the United

question 14

Essay

You set out to forecast the unemployment rate in the United States (UrateUS), using
quarterly data from 1960, first quarter, to 1999, fourth quarter.
(a)The following table presents the first four autocorrelations for the United States
aggregate unemployment rate and its change for the time period 1960 (first quarter)to
1999 (fourth quarter).Explain briefly what these two autocorrelations measure. First Four Autocorrelations of the U.S. Unemployment Rate and its Change,
1960:I - 1999 IV
$\begin{array}{|c|c|c|}\hline \mathrm{Lag} & \text { Unemployment Rate } & \begin{array}{c}\text { Change of } \\\text { Unemployment Rate }\end{array} \\\hline 1 & 0.97 & 0.62 \\\hline 2 & 0.92 & 0.32 \\\hline 3 & 0.83 & 0.12 \\\hline 4 & 0.75 & -0.07 \\\hline\end{array}$

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Definitions:

Adrenal Medullary Hormones

Hormones produced by the adrenal gland's medulla, such as adrenaline and noradrenaline, that are involved in stress responses.

Stress

The body’s method of reacting to a condition such as a threat, challenge or physical and psychological barrier, stimulating a fight or flight response.

Blood Glucose

The concentration of glucose present in the blood, important for energy supply and metabolic regulation.

Consuming Meal

The act of eating food, which initiates the digestion process and provides the body with nutrients and energy.