THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
The table below is the data set of the Shiller Real Home Price Index for the years 1894-1904.
Use a smoothing constant of α = 0.8 to determine the forecasts using simple exponential smoothing.

-The component in a time series that reflects a long-term,relatively smooth pattern or direction exhibited by a time series over a long time period (more than one year)is called the:
A)trend component.
B)cyclical component.
C)seasonal component.
D)irregular component.

Question

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
The table below is the data set of the Shiller Real Home Price Index for the years 1894-1904.
Use a smoothing constant of α = 0.8 to determine the forecasts using simple exponential smoothing.
 
-The component in a time series that reflects a long-term,relatively smooth pattern or direction exhibited by a time series over a long time period (more than one year)is called the:
A)trend component. 
B)cyclical component. 
C)seasonal component. 
D)irregular component.

Quizplus · Accepted Answer

The trend component reflects the long-term, relatively smooth pattern or direction exhibited by a time series over a long time period. This is different from the cyclical and seasonal components, which represent shorter-term patterns and fluctuations, and the irregular component, which represents random variation.