If We Fit a Linear Trend to Data That Are

question 26

Multiple Choice

If we fit a linear trend to data that are growing exponentially, which is least likely?

• A)The fitted trend will be too low at the beginning and end.
• B)The fitted trend will be too high in the middle.
• C)The forecasts (if extrapolated) will be too low.
• D)The fit will be poor to the most recent data.

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Definitions:

Trade Pattern

A trade pattern refers to the systematic way in which countries engage in international trade, determined by factors like comparative advantage, geographic location, and economic policies.

World Prices

The international market prices of goods and services, influenced by factors such as supply, demand, and trade policies.

Absolute Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than any other production entity.

Comparative Advantage

The ability of an individual or group to carry out a particular economic activity more efficiently than another activity.