If We Wanted to Measure the Seasonal Variations on Stock

question 144

Multiple Choice

If we wanted to measure the seasonal variations on stock market performance by month, we would need:

• A)50 indicator variables, since the stock market has a 5-day working week.
• B)12 indicator variables to represent the 12 months.
• C)11 indicator variables.
• D)55 indicator variables.

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually do pay.

Equilibrium

The condition where supply and demand in the market are equal, leading to stable prices.

Consumer Surplus

The disparity in amounts between what is potentially spent by consumers and what is actually spent on a good or service.

Demand Curve

A graphical representation that shows the relationship between the price of a good and the quantity demanded by consumers.