The model y_t = T_t + C_t + S_t + R_t + ε_t that assumes the time series value at time t is the sum of the four time series components T_t,C_t,S_t,and R_t is referred to as: A)additive model B)multiplicative model C)moving averages model D)forecast model

Question

Quizplus · Accepted Answer

The model y_t = T_t + C_t + S_t+ R_t is an additive model since the time series value at time t is the sum of the individual components. In contrast, a multiplicative model would involve the product of the components. Moving averages and forecast models are not types of time series models, but rather techniques used to analyze and make predictions on time series data.

The Model Yt = Tt + Ct + St

The Model Y_t = T_t + C_t + S_t