Dummy Variables Can Be Used to Address the Problem of Seasonality

question 2

True/False

Dummy variables can be used to address the problem of seasonality in regression models.

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Definitions:

Trend

The general direction in which something is developing or changing over time.

Seasonal Effect

Variations in data or phenomena that occur at specific regular intervals within a year, attributable to the changing seasons.

Cyclical Effect

Economic fluctuations or trends that occur over regular time intervals, often related to business cycles.

Seasonal Additive Model

In time series analysis, a model that adjusts for seasonal effects by adding seasonal variations at a constant level.