1. a. Smoothing eliminates seasonal variation thus helping to identify long term trend.
b. Mean of three = 2446 and seasonal effect = -132
c. Seasonal effect for 31 March = -129.25, for 31 July = 255 and for 30 November = -119
d. seasonally adjusted level is 2139. The mayor is not correct as the downward trend is continuing.
e. Forecasts for unemployment levels on 30/11/96 is 1936, for 31/3/97 is 1847 and for 31/7/97 is 2152
2. a. Any two of long term trend component, seasonal component or random component.
b. (i) Moving mean = 0.672, Centred moving mean = 0.57575 and Individual seasonal effect = 0.0933
(ii) Seasonal effect for summer = 0.0933
(iii) Adjusted occupancy rate = 0.5347
c. (i) A downward / decreasing long term trend.
(ii) Better. Seasonally adjusted value is greater than the centred moving mean value.
(iii) Forecast for occupancy rate in Summer 1998 is 0.5758
3. (i) Long term trend and seasonal component.
(ii) For example sales are highest in period ending August
(iii) Three
(iv) No. The seasonally adjusted value of the period ending August 1997 is below the moving mean for period ending August 1997.
