When the percentage difference between the consecutive observations are more or less constant, which trend model should be used? a. Quadratic trend. b. Linear trend. c. Linear or quadratic trend. d. Exponential trend.
Question
When the percentage difference between the consecutive observations are more or less constant, which trend model should be used? a. Quadratic trend. b. Linear trend. c. Linear or quadratic trend. d. Exponential trend.
Solution
The correct answer is d. Exponential trend. This model should be used when the percentage difference between consecutive observations is more or less constant. This is because an exponential trend is characterized by a constant percentage increase or decrease over time.
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