Question

With reference to time series data patterns, a cyclical pattern is the component of the time series that:

a. is characterized by a linear variation of the dependent variable with respect to time.


b. shows a periodic pattern lasting more than one year.


c. shows a periodic pattern lasting one year or less.


d. does not vary with respect to time.

Answer 1

b. shows a periodic pattern lasting more than one year.

Explanation:

A cyclical pattern is the component of the time series that exhibit fluctuations in the data pattern. The frequency at which the data rises and falls is not fixed. The fluctuations occurring in the cyclical pattern can last up to 2 years or more.

Time series patterns are of three types, namely, trend, seasonal, and cyclical. The trend is associated with an increase in data that lasts a long period of time. The seasonal increase in data occurs at a definite frequency.