Q5. Based upon the output, which equation explains the cause for variation of Very Vegan’s sales over the sample period?

A)   The cause cannot be determined using the given information.

B)   Both the simple linear trend and the log-linear trend have equal explanatory power.

C)   The simple linear trend.

Q6. With respect to the possible problems of autocorrelation and nonstationarity, using the log-linear transformation appears to have:

A)   improved the results for autocorrelation but not nonstationarity.

B)   improved the results for nonstationarity but not autocorrelation.

C)   not improved the results for either possible problems.

Q7. The primary limitation of both models is that:

A)   the results are difficult to interpret.

B)   each uses only one explanatory variable.

C)   regression is not appropriate for estimating the relationship.

Q8. Using the simple linear trend model, the forecast of sales for Very Vegan for the first out-of-sample period is:

A)   $113.0 million.

B)   $97.6 million.

C)   $123.0 million.

 Q9. Using the log-linear trend model, the forecast of sales for Very Vegan for the first out-of-sample period is:

A)   $121.2 million.

B)   $117.0 million.

C)   $109.4 million.

答案和详解如下：

Q5. Based upon the output, which equation explains the cause for variation of Very Vegan’s sales over the sample period?

A)   The cause cannot be determined using the given information.

B)   Both the simple linear trend and the log-linear trend have equal explanatory power.

C)   The simple linear trend.

Correct answer is A)

To actually determine the explanatory power for sales itself, fitted values for the log-linear trend would have to be determined and then compared to the original data. The given information does not allow for such a comparison.

Q6. With respect to the possible problems of autocorrelation and nonstationarity, using the log-linear transformation appears to have:

A)   improved the results for autocorrelation but not nonstationarity.

B)   improved the results for nonstationarity but not autocorrelation.

C)   not improved the results for either possible problems.

Correct answer is C)

The fact that there is a significant trend for both equations indicates that the data is not stationary in either case. As for autocorrelation, the analyst really cannot test it using the Durbin-Watson test because there are fewer than 15 observations, which is the lower limit of the DW table. Looking at the first-order autocorrelation coefficient, however, we see that it increased (in absolute value terms) for the log-linear equation. If anything, therefore, the problem became more severe.

Q7. The primary limitation of both models is that:

A)   the results are difficult to interpret.

B)   each uses only one explanatory variable.

C)   regression is not appropriate for estimating the relationship.

Correct answer is B)

The main problem with a trend model is that it uses only one variable so the underlying dynamics are really not adequately addressed. A strength of the models is that the results are easy to interpret. The levels of many economic variables such as the sales of a firm, prices, and gross domestic product (GDP) have a significant time trend, and a regression is an appropriate tool for measuring that trend.

Q8. Using the simple linear trend model, the forecast of sales for Very Vegan for the first out-of-sample period is:

A)   $113.0 million.

B)   $97.6 million.

C)   $123.0 million.

Correct answer is B)

The forecast is 10.0015 + (13 × 6.7400) = 97.62.

Q9. Using the log-linear trend model, the forecast of sales for Very Vegan for the first out-of-sample period is:

A)   $121.2 million.

B)   $117.0 million.

C)   $109.4 million.

Correct answer is B)

The forecast is e^{2.9803 + (13 × 0.1371)} = 117.01.

tjanks