The level of construction employment in West Virginia is lowest during the winter.A model designed to forecast construction employment in Charleston should use:
A)a time trend
B)a moving average
C)seasonal indicator variable
D)an autoregressive model

Question

Quizplus · Accepted Answer

The fact that construction employment in West Virginia is lowest during the winter suggests that there is a seasonal pattern to construction employment in the region. Therefore, a seasonal indicator variable would be the best choice to incorporate this pattern into a forecasting model for construction employment in Charleston. A time trend or autoregressive model would not be appropriate without additional information, and a moving average may not sufficiently capture the seasonal component.

The Level of Construction Employment in West Virginia Is Lowest