Suppose That You Are Using the Four-Period Simple Moving Average

question 135

Multiple Choice

Suppose that you are using the four-period simple moving average method to forecast sales, and sales have been increasing by 20% every period. How will your forecasts perform?

• A) Forecasts will be lower than actual.
• B) Forecasts will be higher than actual.
• C) Forecasts will equal actual.
• D) Forecasts will be decreasing.
• E) Forecasts will be increasing by 5.0% every period.

---

Definitions:

Real Income

The income of an individual or group after adjusting for inflation, reflecting the true purchasing power of the income.

Bureau Of Labor Statistics

A U.S. government agency responsible for collecting, analyzing, and distributing essential statistical data related to labor market activity, working conditions, and price changes in the economy.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, typically used as an indicator of inflation.

Unemployment Rate

The percentage of the labor force that is jobless and actively seeking employment, used as a key indicator of the labor market's health.