There Are at Least Three Forecasting Methods

question 31

Essay

There are at least three forecasting methods. Name them and choose one to discuss in more detail, including advantages and disadvantages.

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Definitions:

Average Rate of Return

A calculation used to measure the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach, aiming to equalize purchasing power by taking into account inflation rates and cost of living.

Exchange Rate

The worth of one currency relative to another for conversion purposes, establishing the amount of one currency that can be swapped for another.