9/3/2021 Multiple Choice Quiz

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Multiple Choice Quiz
Chapter 1
Chapter 2 1. A qualitative forecast
Chapter 3 a. predicts the quality of a new product.

Chapter 4 b. predicts the direction, but not the

Chapter 5 magnitude, of change in a variable.

Chapter Overview c. is a forecast that is classified on a numerical

True/False Quiz scale from 1 (poor quality) to 10 (perfect quality).

Multiple Choice Quiz d. is a forecast that is based on econometric

Case Problem Sets methods.

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2. Which of the following is not a qualitative forecasting  
Additional Case Examples technique?
Chapter 6
a. Surveys of consumer expenditure plans

Chapter 7
b. Perspectives of foreign advisory councils

Chapter 8
c. Consumer intention polling

Chapter 9
d. Time-series analysis

Chapter 10
Chapter 11 3. The first step in time-series analysis is to
Chapter 12 a. perform preliminary regression calculations.
Chapter 13 b. calculate a moving average.

Chapter 14
c. plot the data on a graph.

Linear Programming Chapter

d. identify relevant correlated variables.

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4. Forecasts are referred to as naive if they
a. are based only on past values of the
variable.

b. are short-term forecasts.

  c. are long-term forecasts.

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d. generally result in incorrect forecasts.

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5. Time-series analysis is based on the assumption that
a. random error terms are normally
distributed.

b. there are dependable correlations between

the variable to be forecast and other independent
variables.

c. past patterns in the variable to be forecast

will continue unchanged into the future.

d. the data do not exhibit a trend.

6. Which of the following is not one of the four types of

variation that is estimated in time-series analysis?
a. Predictable

b. Trend

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9/3/2021 Multiple Choice Quiz

c. Cyclical

d. Irregular

7. The cyclical component of time-series data is usually

estimated using
a. linear regression analysis.

b. moving averages.

c. exponential smoothing.

d. qualitative methods.

8. In time-series analysis, which source of variation can be

estimated by the ratio-to-trend method?
a. Cyclical

b. Trend

c. Seasonal

d. Irregular

9. If regression analysis is used to estimate the linear

relationship between the natural logarithm of the variable
to be forecast and time, then the slope estimate is equal
to
a. the linear trend.

b. the natural logarithm of the rate of growth.

c. the natural logarithm of one plus the rate of

growth.

d. the natural logarithm of the square root of

the rate of growth.

10. The use of a smoothing technique is appropriate when

a. random behavior is the primary source of
variation.

b. seasonality is present.

c. data exhibit a strong trend.

d. all of the above are correct.

11. The greatest smoothing effect is obtained by using

a. a moving average based on a small number
of periods.

b. exponential smoothing with a small weight

value.

c. the root-mean-square error.

d. the barometric method.

12. The root-mean-square error is a measure of

a. sample size.

b. moving average periods.

c. exponential smoothing.

d. forecast accuracy.

13. Barometric methods are used to forecast

a. seasonal variation.

b. secular trend.

c. cyclical variation.

d. irregular variation.

14. A leading indicator is a measure that usually

a. changes at the same time and in the same
direction as the general economy.

b. responds to a change in the general

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9/3/2021 Multiple Choice Quiz
economy after a time lag.

c. changes in the same direction as the

general economy before the general economy
changes.

d. has all of the properties listed above.

15. If 3 of the leading indicators move up, 2 move down, and

the remaining 6 are constant, then the diffusion index is
a. 3/6 = 50%

b. 3/11 = 27%

c. 5/11 = 45%

d. 6/11 = 55%

16. A single-equation econometric model of the demand for a

product is a ________ equation in which the quantity
demanded of the product is an ________ variable.
a. structural, exogenous

b. structural, endogenous

c. definitional, exogenous

d. definitional, endogenous

17. A reduced form equation expresses

a. an exogenous variable as a function of
endogenous variables.

b. an endogenous variable as a function of

exogenous variables.

c. an exogenous variable as a function of both

endogenous and exogenous variables.

d. an endogenous variable as a function of

both exogenous and endogenous variables.

18. Trend projection is an example of which kind of

forecasting?
a. Qualitative

b. Time-series

c. Barometric

d. Econometric

19. Turning points in the level of economic activity can be

forecast by using
a. Time-series analysis

b. Exponential smoothing

c. Barometric methods

d. Moving average

20. Econometric forecasts require

a. accurate estimates of the coefficients of
structural equations.

b. forecasts of future values of exogenous

variables.

c. appropriate theoretical models.

d. all of the above.

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