Tag: time series and forecasting

Questions Related to time series and forecasting

The general pattern of increase or decrease in economics or social phenomena is shown by:

business mathematics and statistics moving averages introduction to time series introduction to time series and forecasting time series and forecasting uses of average in day-to-day life

  1. Seasonal trend

  2. Cyclical trend

  3. Secular trend

  4. Irregular trend

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  The general pattern of increase or decrease in economics or social phenomena is shown by : $Secular\, trend$.

$\Rightarrow$  Term tendency of the time series to move in an upward or down ward direction. It indicates how on the whole, it has behaved over the entire period under reference.
$\Rightarrow$  These are result of long-term forces that gradually operate on the time series variable. A general tendency of a variable to increase, decrease or remain constant in long term.
$\Rightarrow$  Secular trend is be long-term tendency of the time series to move on upward or downward direction. It indicates how on the whole behaved over the entire period under reference.

Secular trend can be measured by:

business mathematics and statistics moving averages introduction to time series introduction to time series and forecasting time series and forecasting uses of average in day-to-day life

  1. Two methods

  2. Three methods

  3. Four methods

  4. Five methods

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  Secular trend can be measured by: $Four\, methods.$

$\Rightarrow$  The four methods are: 
$(1)$  Graphic or a Freehand Curve Method.
$(2)$  Method of Semi Averages.
$(3)$  Method of Moving Averages.
$(4)$  Method of Least Squares.

Damages due to floods, droughts, strikes fires and political disturbances are:

business mathematics and statistics moving averages introduction to time series introduction to time series and forecasting time series and forecasting uses of average in day-to-day life

  1. Trend

  2. Seasonal

  3. Cyclical

  4. Irregular

Show answer
Correct Option: D
Explanation:

$\Rightarrow$  Damages due to floods, drought, strikes fires and political disturbances are : $Irregular$.

$\Rightarrow$  Irregular variations which occur on account of random external events.
$\Rightarrow$  These variations either go very deep downward or too high upward to attain peaks abruptly. These fluctuations are a result of unforeseen and unpredictably forces which operate in absolutely random or erratic manner.
$\Rightarrow$  These variations are due to floods, wars, famines, earthquakes, strikes, lockouts, epidemics etc.

The method of moving average is used to find the:

business mathematics and statistics moving averages introduction to time series introduction to time series and forecasting time series and forecasting uses of average in day-to-day life

  1. Secular trend

  2. Seasonal variation

  3. Cyclical variation

  4. Irregular variation

Show answer
Correct Option: A
Explanation:

$\Rightarrow$  The method of moving average is used to find the : $Secular\, trend.$

$\Rightarrow$  A moving average is an average (Arithmetic mean) of fixed number of items (known as periods) which moves through a series by dropping the first item of the previously averaged group and adding the next item in each successive average.
$\Rightarrow$   The value so computed is considered the trend value for the unit of time falling at the center of the period used in the calculation of the average.

A complete cycle passes through:

business mathematics and statistics moving averages introduction to time series introduction to time series and forecasting time series and forecasting uses of average in day-to-day life

  1. Two stages

  2. Three stages

  3. Four stages

  4. Difficult to tell

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  A complete cycle passes through : $Four\, stages$.

$\Rightarrow$  Four stages are : 

$(1)$  Prosperity Stage : Expansion or Boom or Upswing of economy.
$(2)$  Recession Stage : from prosperity to recession (upper turning point).
$(3)$  Depression Stage : Contraction or Downswing of economy.
$(4)$  Recovery Stage : from depression to prosperity (lower turning Point).

The rise and fall of a time series over periods longer than one year is called

business mathematics and statistics moving averages introduction to time series introduction to time series and forecasting time series and forecasting uses of average in day-to-day life

  1. Secular trend

  2. Seasonal variation

  3. Cyclical variation

  4. Irregular variation

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  The rise and fall of time series over periods longer than one year is called $Cyclical\,variation.$

$\Rightarrow$  Cyclical variations, which are also generally termed as business cycles, are the periodic movements. These variations in a time series are due to ups & downs recurring after a period from Season to Season.
$\Rightarrow$   Though they are more or less regular, they may not be uniformly periodic. These are oscillatory movements which are present in any business activity and is termed as business cycle.
$\Rightarrow$  It has got four phases consisting of prosperity (boom), recession, depression and recovery. All these phases together may last from 7 to 9 years may be less or more.

The secular trend is measured by the method of semi-averages when:

business mathematics and statistics moving averages introduction to time series introduction to time series and forecasting time series and forecasting uses of average in day-to-day life

  1. Time series based on yearly values

  2. Time series consists of even number of values

  3. Trend is linear

  4. None of them

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  The secular trend is measured by the method of semi-averages when : $Trend\,is\,linear.$

$\Rightarrow$  Under this method the whole time series data is classified into two equal parts and the averages for each half are calculated. If the data is for even number of years, it is easily divided into two.
$\Rightarrow$   If the data is for odd number of years, then the middle year of the time series is left and the two halves are constituted with the period on each side of the middle year.
$\Rightarrow$  The arithmetic mean for a half is taken to be representative of the value corresponding to the midpoint of the time interval of that half. Thus we get two points. 

$\Rightarrow$  These two points are plotted on a graph and then are joined by straight line which is our required trend line.

Increased demand of admission in the subject of computer in Pakistan is:

business mathematics and statistics moving averages introduction to time series introduction to time series and forecasting time series and forecasting uses of average in day-to-day life

  1. Secular trend

  2. Cyclical trend

  3. Seasonal trend

  4. Irregular trend

Show answer
Correct Option: A
Explanation:

$\Rightarrow$  Increased demand of admission in the subject of computer in Pakistan is : $Secular\, trend$.

$\Rightarrow$  Secular trend is be long-term tendency of the time series to move on upward or downward direction.
$\Rightarrow$  It indicates how on the whole behaved over the entire period under reference. These are result of long term forces that gradually operate on the time series variable.
$\Rightarrow$  Most of the time series relating to Economic, Business and Commerce might show an upward tendency in case of population, production & sales of products, incomes, prices; or downward tendency might be noticed in time series relating to share prices, death, birth rate etc. due to global melt down, or improvement in medical facilities etc. All these indicate trend.

The fire in a factory is an example of

business mathematics and statistics moving averages introduction to time series introduction to time series and forecasting time series and forecasting uses of average in day-to-day life

  1. Secular trend

  2. Seasonal movements

  3. Cyclical variations

  4. Irregular variations

Show answer
Correct Option: D
Explanation:

$\Rightarrow$  The fire in factory is an example of $Irregular\, variations.$

$\Rightarrow$  Irregular variations which occur on account of random external events.
$\Rightarrow$ These variations either go very deep downward or too high upward to attain peaks abruptly.
$\Rightarrow$  They do not have any definite pattern and it cannot be predicted in advance. These variations are due to floods, wars, famines, earthquakes, strikes, lockouts, epidemics etc.

Wheat crops badly damaged on account of rains is

business mathematics and statistics moving averages introduction to time series introduction to time series and forecasting time series and forecasting uses of average in day-to-day life

  1. Cyclical movement

  2. Random movement

  3. Secular trend

  4. Seasonal movement

Show answer
Correct Option: B
Explanation:

$\Rightarrow$  Wheat crops badly damaged on account of rains is $Random\, movement$

$\Rightarrow$  Random movement which occur on account of irregular external events.
$\Rightarrow$  These variations either go very deep downward or too high upward to attain peaks abruptly. These fluctuations are a result of unforeseen and unpredictably forces which operate in absolutely random or erratic manner.
$\Rightarrow$  They do not have any definite pattern and it cannot be predicted in advance. These variations are due to floods, wars, famines, earthquakes, strikes, lockouts, epidemics etc.