11.sider the following estimated model:

(Sales_t - Sales _t-1) = 30 + 1.25 (Sales _t-1 - Sales _t-2) + 1.1 (Sales _t-4 - Sales _t-5) t=1,2,.. T

and Sales for the periods 1999.1 through 2000.2:

The forecasted Sales amount for 2000.3 is closest to:

A)   $2,270.

B)   $1,730.

C)   $270.

D)   $2,625.

12. choice a researcher can use to test for nonstationarity is to use a:

A)   Dickey-Fuller test, which uses a modified t-statistic.

B)   Dickey-Fuller test, which uses a modified χ² statistic.

C)   Breusch-Pagan test, which uses a modified t-statistic.

D)   Breusch-Pagan test, which uses a modified F-statistic.

11.sider the following estimated model:

(Sales_t - Sales _t-1) = 30 + 1.25 (Sales _t-1 - Sales _t-2) + 1.1 (Sales _t-4 - Sales _t-5) t=1,2,.. T

and Sales for the periods 1999.1 through 2000.2:

The forecasted Sales amount for 2000.3 is closest to:

A)   $2,270.

B)   $1,730.

C)   $270.

D)   $2,625.

The correct answer was B)

Change in sales = $30 + 1.25 ($2,000-1,800) + 1.1 ($1,400-1,900)

Change in sales = $30 + 250 - 550 = -$270

Sales = $2,000 – 270 = $1,730

12. choice a researcher can use to test for nonstationarity is to use a:

A)   Dickey-Fuller test, which uses a modified t-statistic.

B)   Dickey-Fuller test, which uses a modified χ² statistic.

C)   Breusch-Pagan test, which uses a modified t-statistic.

D)   Breusch-Pagan test, which uses a modified F-statistic.

The correct answer was A)

The Dickey-Fuller test estimates the equation (x_t – x_t-1) = b₀ + b₁ × x_t-1 - x_t-1 + e_t and tests if H₀: (b₁ – 1) = 0. Using a modified t-test, if it is found that (b₁–1) is not significantly different from zero, then it is concluded that b₁ must be equal to 1.0 and the series has a unit root.