I in the Linear Trend Equation, T Is Any Value

question 141

Multiple Choice

i. In the linear trend equation, t is any value that corresponds with a time period, i.e., month or
Quarter.
ii. The least squares method of computing the equation for a straight line going through the data of
Interest gives the "best fitting" line.
iii. If the sales, production or other data over a period of time tend to approximate a straight-line
Trend, the equation developed by the least squares method cannot be used to forecast sales for a
Future period.

• 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:

Income Elasticity

A measure of how much the demand for a good or service changes in response to a change in consumers' income, indicating its necessity or luxury status.

Education Demanded

The quantity and type of education that individuals or society seek, often influenced by the job market and societal values.

Cross-price Elasticity

Measures the responsiveness of the demand for one good to a change in the price of another good.

Good Y

Typically, a variable used in economic models to represent a generic good or service in the market.