I the Moving Average Method Averages Out Cyclical (C) and Irregular

question 90

Multiple Choice

i. The moving average method averages out cyclical (C) and irregular (I) components. ii. To apply the moving average method to a time series, the data should follow a linear trend and have a definite rhythmic pattern of fluctuations that repeat (say, every three years) .
iii. Sales, production and other economic and business series usually have periods of oscillation that are of equal length or identical amplitudes.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Price Inelastic

Describes a situation where the demand for a product does not change much in response to changes in its price.

Income Elastic

A measure of how the demand for a good or service changes in response to changes in consumers' income.

Price Inelastic

A characteristic of a good or service for which demand does not significantly change with a change in its price.

Price Support

The term used to refer to price floors applied to farm commodities; the minimum price that the government allows farmers to receive for farm commodities like wheat or corn.