Question
Time series decomposition seeks to separate the time series (Y) into 4 components: trend (T), cycle (C), seasonal (S), and irregular (I). What is the
Time series decomposition seeks to separate the time series (Y) into 4 components: trend (T), cycle (C), seasonal (S), and irregular (I). What is the difference between these components?
The model can be additive
or multiplicative. When do we use an additive model? When do we use a
multiplicative model?
The following list gives
the gross federal debt (in millions of dollars) for the U.S. every 5 years from
1945 to 2000:
YearGross Federal Debt ($millions)
1945260,123
1950256,853
1955274,366
1960290,525
1965322,318
1970380,921
1975541,925
1980909,050
19851,817,521
19903,206,564
19954,921,005
20005,686,338
Construct a scatter plot
with this data. Do you observe a trend? If so, what type of trend do you
observe?
Use Excel to fit a linear
trend and an exponential trend to the data. Display the models and their
respective r^2.
Interpret both models.
Which model seems to be more appropriate? Why?
Provide an example from
your personal or professional life where time series data can be useful. where time series data can be useful
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