Which of the following time series components is associated with long-term movement in the data?a.Trendb.Seasonalityc.Cyclicald.RandomClear my choice
Question
Which of the following time series components is associated with long-term movement in the data?
- a. Trend
- b. Seasonality
- c. Cyclical
- d. Random
Clear my choice
Solution
To determine which time series component is associated with long-term movement in the data, let's analyze the options provided:
-
Trend: This refers to the long-term progression of the series. It indicates a general direction in which the data is moving over an extended period, either upwards or downwards.
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Seasonality: This component reflects regular, periodic fluctuations that occur at specific intervals within a time series, typically within a year or a specific season. It does not represent long-term movements but rather short-term variations.
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Cyclical: Cyclical variations are long-term fluctuations that occur over periods that are longer than a single year, often influenced by economic or business cycles. However, these are not as stable or predictable as trends.
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Random: Random variations are irregular movements that do not follow any trend or pattern. They are unpredictable and do not contribute to long-term analysis.
Conclusion:
Among the listed components, Trend (a) is the one that signifies long-term movement in the data. Therefore, the correct answer is:
a. Trend.
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