I a Typical Monthly Seasonal Index of 107

question 44

Multiple Choice

i. A typical monthly seasonal index of 107.0 indicates that sales (or whatever the variable is) are 7
Percent above the annual average.
ii. For a quarterly time series, the initial step, using the ratio-to-moving average method, is to
Remove the seasonal components from the time series using a 3-month centered moving average.
iii. In the final step, using the ratio-to-moving-average method on quarterly data, the total of the
Modified means should theoretically be equal to 400 because the average of should be 100.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Supply Curve

A graph illustrating how much of a product a firm will sell at different prices.

Zero-Profit Equilibrium

A situation in competitive markets wherein, due to free entry and exit, firms only earn a normal profit, which is their lowest level of profit necessary to keep them in business.

Industry Expands

The process of a sector growing in size through increased production, possibly due to higher demand or technological advancements.

AVC

Average Variable Cost, which is the variable cost per unit of output, calculated by dividing total variable costs by the quantity of output.