Question

A time series consists of:

• A. Short-term variations
• B. Long-term variations
• C. Irregular variations
• D. All of the above

Answer 1

The correct option is D All of the above

$\Rightarrow$ A time series consist of $Short-termvariations,Long-termvariationsandIrregularvariation.$

$\Rightarrow$ $Shorttermvariation-$ Seasonal trends are short term movements occurring in data due to seasonal factors. For example, it is commonly observed that the consumption of ice-cream during summer is generally high and hence an ice-cream dealer's sales would be higher in some months of the year while relatively lower during winter months.

$\Rightarrow$ $Longtermvariation-$ The secular trend is the main component of a time series which results from long term effects of socio-economic and political factors. Prices and export and import data, for example, reflect obviously increasing tendencies over time.

$\Rightarrow$ $Irregularvariation-$These are sudden changes occurring in a time series which are unlikely to be repeated. They are components of a time series. Floods, fires, earthquakes, revolutions, epidemics, strikes etc., are the root causes of such irregularities