Linear trend analysis assumes:
A)constant period-by-period unit change in an important economic variable over time.
B)constant period-by-period percentage change in an important economic variable over time.
C)variable period-by-period unit change in an important economic variable over time.
D)variable period-by-period percentage change in an important economic variable over time.

Question

Quizplus · Accepted Answer

Linear trend analysis assumes a constant period-by-period unit change in an important economic variable over time. This means that the trend is expected to be linear, with a consistent increase or decrease in the variable measured in constant units over time. This can be useful for predicting future values based on the historical trend. In contrast, choice B would be an example of exponential trend analysis, which assumes a constant period-by-period percentage change in the variable over time. Choice C and D are not consistent with the assumptions of linear trend analysis. Linear trend analysis assumes that there is a constant period-by-period unit change in an important economic variable over time. This means that the variable is changing at a steady rate over time, which allows for the creation of a straight line trend.

Linear Trend Analysis Assumes