Statement of a problem № m40102


A large company is considering cutting back on its TV advertising in favor of business videos to be given to its customers. This action is being considered after the company president read a recent article in the popular press touting business videos as today s "hot sales weapon." One thing the president would like to investigate prior to taking this action is the history of TV advertising in this country, especially the trend-cycle. Table P-7 contains the total dollars spent on U.S. TV advertising (in millions of dollars). Table P-7 a. Plot the time series of U.S. TV advertising expenditures. b. Fit a linear trend to the advertising data and plot the fitted line on the time series graph. c. Forecast TV advertising dollars for 1998. d. Given the results in part b, do you think there may be a cyclical component in TV advertising dollars? Explain.

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