The manager of a luxury car rental company has noticed that demand for rentals is highly dependent on the state of the national economy. When the economy is performing well, she experiences lots of demand. However, when the economy is poor, she experiences very little demand. This demand pattern is likely an example of?
A) Trend
B) Seasonality
C) Cyclical
D) Random variation

Question

Quizplus · Accepted Answer

The pattern of demand being highly dependent on the state of the national economy suggests that it is cyclical. Cyclical patterns are typically associated with fluctuations in the economy or business cycles. Trends refer to long-term changes in data, seasonality refers to regular fluctuations over a period of time (such as sales being higher during the holiday season), and random variation refers to unpredictable fluctuations that do not follow any particular pattern.

The Manager of a Luxury Car Rental Company Has Noticed