Explain the difference between the Moving Average and Exponential Smoothing approaches to forecasting
What will be an ideal response?
The Moving Average approach assigns equal weights to each time period from which data are obtained, and drops the oldest time period when a new time period is added in calculating the average value.
The Exponential Smoothing approach assigns different weights to each time period from which data are drawn, with the smallest weight given the oldest time period and the greatest weight to the most recent period (all the weights are fractional, usually employing a geometric progression, and must add up to one).
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When the Fed sells $100 worth of bonds to a primary dealer, reserves in the banking system
A) increase by $100. B) increase by more than $100. C) decrease by $100. D) decrease by more than $100.
If the government were to increase its spending, it would expect:
A. aggregate demand to shift to the right. B. aggregate demand to shift to the left. C. aggregate supply to shift to the right. D. aggregate supply to shift to the left.
Refer to Table 8.2. Assume that Sherry's Earrings is producing in a perfectly competitive market and the market price for earrings is $60. To maximize profits Sherry should produce __________ pairs of earrings. A) two B) three C) four D) five
The profit-maximizing perfect competitor will produce at that output at which
A. marginal cost equals marginal revenue. B. total revenue is maximized. C. average total profit is maximized.