EWMA time series question with plots and i have no idea what to do

SoccerBoss
Category:
Statistics
Price: $5 USD

Question description

01020-303QuarterPercent Change

Edit Coordinates...(0,0)

x y graph

wequals=0.30.3

The plots to the left and right show exponentially weighted moving averages​ (EWMA) of the percentage change of a​ country's gross national product​ (GNP). The time series is quarterly for a​ five-year period. To the​ left, the weight w in the EWMA is

0.30.3,

and

wequals=0.80.8

to the right. The EWMA in both cases is shown as a line and the surrounding data as dots. Complete parts a through c below.

01020-303QuarterPercent Change

Edit Coordinates...(0,0)

x y graph

wequals=0.80.8

(a) Which smoothing constant do you think produces a better summary of the underlying trend in the percentage changes in​ GNP?

The EWMA with

wequals=

0.8

is better because it

captures less random variation.

(b) In the most recent quarter​ (the last data point in this​ series), the GNP was estimated to be

$11.18111.181

billionbillion.

What would you​ forecast, having seen these​ plots, for GNP for the next​ quarter?

The GNP for the next quarter should be about

$nothing

billionbillion.

(Round to three decimal places as​ needed.)


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