The Multiplicative Model

question 14

Multiple Choice

The multiplicative model

• A)uses centered moving averages to smooth the trend fluctuations.
• B)removes trend before isolating the seasonal components.
• C)deseasonalizes a time series by dividing the values by the appropriate seasonal index.
• D)provides a unique seasonal index for each observation of the time series.

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Definitions:

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), reflecting the true value of goods and services.

Final Output

The total value of all goods and services produced and sold by a country in a specific time period without any duplication.

Intermediate Goods

Goods that are used as inputs in the production of other goods and services, rather than being sold directly to end consumers.

GDP

The Gross Domestic Product measures the overall market or financial worth of every completed good and service produced within a country's borders in a set period.