The Accuracy of an Econometric Forecast Would Be Most Questionable

question 14

Multiple Choice

The accuracy of an econometric forecast would be most questionable when the:

• A) stochastic error term is small and randomly distributed.
• B) stochastic error term is large and randomly distributed.
• C) stochastic error term is large and not randomly distributed.
• D) expected value of the stochastic error term equals zero.

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