Causal models
A)provide evidence of a causal relationship between an independent variable and the variable to be forecast.
B)use the average of the most recent data values in the time series as the forecast for the next period.
C)occur whenever all the independent variables are previous values of the same time series.
D)relate a time series to other variables that are believed to explain or cause its behavior.

Question

Quizplus · Accepted Answer

Causal models relate a time series to other variables that are believed to explain or cause its behavior. They attempt to establish a cause-and-effect relationship between two variables. A is incorrect as causal models do not always provide evidence of a causal relationship between an independent variable and the variable to be forecast. B is incorrect as causal models do not use the average of the most recent data values in the time series as the forecast for the next period. C is incorrect as causal models do not occur whenever all the independent variables are previous values of the same time series.

Causal Models