Which of the following statements are correct?
(A) The quantitative method of forecasting assumes that the pattern of the past will continue in the future.
(B) Qualitative methods of forecasting can be used only when historic data of the variable are available.
(C) When forecasting is done on the basis of historic data of past values, it is called a time series method.
(D) Pooled data are a combination of time series data and cross-sectional data.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A), (C) and (D) only
Quantitative forecasting uses past data that can be measured, and assumes the past pattern will go on. Qualitative forecasting rests on expert judgement and opinion, so it is useful exactly when data cannot be measured or past data are not available.
So quantitative methods rely on the past pattern, qualitative methods do not need past data, forecasting from past values is a time series method, and pooled data mix time series and cross-sectional data.
Checking the statements
(A) The quantitative method of forecasting assumes that the pattern of the past will continue in the future. — Correct. This assumption is the basis of the quantitative method.
(B) Qualitative methods of forecasting can be used only when historic data of the variable are available. — Incorrect. They can be used even when no past data are available, since they rest on expert opinion.
(C) When forecasting is done on the basis of historic data of past values, it is called a time series method. — Correct. This is the meaning of a time series method.
(D) Pooled data are a combination of time series data and cross-sectional data. — Correct. This is the meaning of pooled data.