Negative Autocorrelation in the Change of a Variable Implies That

question 12

Multiple Choice

Negative autocorrelation in the change of a variable implies that

• A)the variable contains only negative values.
• B)the series is not stable.
• C)an increase in the variable in one period is, on average, associated with a decrease in the next.
• D)the data is negatively trended.

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Definitions:

Government Purchases Component

The part of gross domestic product (GDP) that includes spending by all levels of government on goods and services.

Social Security Benefits

Government payments made to eligible individuals, such as retirees or disabled workers, as part of a social insurance program.

Investment Component

The portion of GDP or economic output that is attributed to investment in physical assets, like buildings, equipment, and inventory.

Financial Investment

The allocation of resources into financial assets, such as stocks, bonds, or real estate, with the expectation of receiving future returns.