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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

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Solution

To determine which time series component is associated with long-term movement in the data, let's analyze the options provided:

  1. 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.

  2. 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.

  3. 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.

  4. 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.

This problem has been solved

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