Which of the Following Models Is Assumed for a Quarterly

question 113

Multiple Choice

Which of the following models is assumed for a quarterly time series that seems to grow on average by an increasing amount (or decline by a decreasing amount) and seems to have seasonality?

• A) ln(y_t)= β₀ + β₁d₁ + β₂d₂ + β₃d₃ + β₄t + ε_t
• B) y_t = β₀ + β₁d₁ + β₂d₂ + β₃d₃ + β₄t + ε_t
• C) ln(y_t)= β₀ + β₁d₁ + β₂d₂ + β₃d₃ + β₄d₄ + β₅t + ε_t
• D) y_t = β₀ + β₁d₁ + β₂d₂ + β₃d₃ + β₄d₄ + β₅t + ε_t

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Definitions:

Average Cost

A calculation used in finance and economics that divides the total cost of production by the number of goods produced, yielding the cost per unit.

Perpetual Inventory System

An accounting method that records inventory updates continuously as sales and purchases occur.

FIFO

"First In, First Out," an inventory valuation method where goods first added to inventory are the first sold, used to determine the cost of goods sold and remaining inventory.

Ending Inventory

Ending Inventory is the total value of all inventory, including raw materials, work-in-process, and finished goods, that a company has at the end of an accounting period.