One Technique of Forecasting Is Called the Moving Average

question 39

Multiple Choice

One technique of forecasting is called the moving average.In this method,rather than using last year's sales as the forecast ___________.

• A)A simple average for the last two or four years is used
• B)A smoothing technique is used to determine the forecast
• C)A decomposition of the industry is used to average the sales
• D)An average is calculated using the midpoint of the sales trend and then is computed by multiplying it by a beta coefficient to get the next year's forecast
• E)None of these

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Definitions:

Market Forces

The economic factors affecting the price, demand, and availability of goods and services in a market economy, primarily supply and demand.

Full Employment

A situation in which all available labor resources are being used in the most economically efficient way, typically characterized by the absence of cyclical unemployment.

Keynes

Refers to the economic theories and policies advocated by John Maynard Keynes, which emphasize government intervention to manage economic cycles and stimulate economy-wide demand.

Classical School

An economic theory originating in the late 18th century, emphasizing free markets, competition, and the minimal role of government in the economy.