Seasonal adjustment tends to
A) smooth a time series with an important seasonal component.
B) accentuate seasonal fluctuations.
C) take out the deviations from trend in a time series.
D) make a time series acyclical.

Question

Quizplus · Accepted Answer

Seasonal adjustment aims to smooth out the effects of seasonal fluctuations in a time series in order to better analyze its underlying trend. This is accomplished by removing the seasonal component from the data, which helps to reduce the noise caused by regular seasonal patterns. Therefore, option A is the best choice, as it correctly identifies the main purpose of seasonal adjustment. Option B is incorrect because seasonal adjustment does the opposite of accentuating seasonal fluctuations. Option C is also incorrect, as trend deviations are typically not removed by seasonal adjustment but by other techniques such as detrending. Option D is incorrect because seasonal adjustment does not make a time series acyclical, but rather adjusts it to better reflect its underlying cyclical patterns.

Seasonal Adjustment Tends to