Spain€™s economy has struggled with very high unemployment rates as a result of the Eurozone banking crisis. The following data show the annual unemployment rate over a nine year period. These data can also be found in the Excel file Spain unemployment. xlsx.

a. Using a three period weighted moving average with weights 4, 2, and 1, forecast the unemployment rate for Spain in 2013.
b. Calculate the MAD for the forecast in part a.
c. Using exponential smoothing with α = 0.8, forecast the unemployment rate for Spain in 2013.
d. Calculate the MAD for the forecast in part a.
e. Which forecast do you have most confidence in?

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Year 2004 2005 2006 2007 2008 Unemployment Rate (%) 10.4 9.2 Year 2009 2010 2011 2012 Unemployment Rate () 18.0 20.1 21.7 25.0 8.3 11.3