Question 5 (1 point) The time series plot below (from Figure 6.10 in the textboo

Question

Question 5 (1 point)

The time series plot below (from Figure 6.10 in the textbook) describes the average annual number of weekly hours worked by Canadian manufacturing workers.

Which regression-based model would best fit the series?

Linear trend model with seasonality

Quadratic trend model with seasonality

Linear trend model

Quadratic trend model

Question 6 (1 point)

To model additive seasonality in monthly sales data using regression analysis you would

Use a variable that ranges from 1 to 12 based on which month of the year an observation comes from.

Use a dummy variable representing December, or any other month in which you expect the time series to have a higher than normal value.

Use 11 dummy (binary) independent variables representing the months of the year (omitting one month).

Use the lag-1 (first differenced) time series as an independent variable in your regression.

Question 7 (1 point)

To model multiplicative seasonality in a quarterly time series using regression analysis you would

Question 7 options:

Use the natural log of the time series as the dependent variable and 3 dummy (binary) independent variables representing the quarters (omitting one quarter).

Use the lag-1 (first differenced) time series as an independent variable in your regression.

Use the natural log of 3 dummy (binary) independent variables representing the quarters (omitting one quarter).

Multiply the value of the time series by 1, 2, 3 or 4 depending on which quarter the observation is from for the dependent variable and use dummy variables representing the quarters as the independent variables.

Linear trend model with seasonality

Quadratic trend model with seasonality

Linear trend model

Quadratic trend model

Explanation / Answer

5) the correct option is ©. There is no seasonality in the trend because no particular pattern can be predicted from the graph.

6) The correct option Is (d). WE use lag of the variable that is not stationary to eliminate seasonality.

7) The correct option is (c).

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