Why Is Investment Demand More Unstable Than Personal Consumption

question 50

Multiple Choice

Why is investment demand more unstable than personal consumption?

• A) Because business decisions are often made based on the expectations, and moods of optimism and pessimism concerning future economic conditions.
• B) Because business decisions are often made based only on interest rates.
• C) Because business decisions are made more often than personal purchasing decisions.
• D) Because personal purchasing decisions are often made based on the forecasts of future sales.

---

Definitions:

Time Series

Time Series refers to a sequence of data points collected or recorded at successive time intervals, often analyzed to predict future values or understand trends.

Seasonal Variation

Fluctuations in data or activity levels that occur regularly based on seasonal factors, such as weather, holidays, or school schedules.

Time Series Analysis

Time Series Analysis involves statistical techniques for analyzing time series data in order to extract meaningful statistics and characteristics of the data over time.

Five-period Moving Average

A type of moving average that calculates the average of the most recent five periods or intervals, used in time series analysis to smooth data.