The Measure of Forecast Error Where the Amount of Error

question 14

Multiple Choice

The measure of forecast error where the amount of error of each forecast is squared and then an average is calculated is

• A) mean squared error (MSE).
• B) mean absolute deviation (MAD).
• C) mean absolute percentage error (MAPE).
• D) bias.
• E) the tracking signal.

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Definitions:

Economizing Problem

The issue of limited resources to meet unlimited wants, necessitating choices and prioritizations in the use of resources.

Limited Resources

The finite availability of inputs or resources (labor, capital, land) that can be used for the production of goods and services.

Unlimited Wants

The economic concept that human desires and needs are constant and infinite, whereas the resources to fulfill them are limited.

Best Use

Optimal allocation or application of resources to maximize efficiency or value.