Which of the following is NOT considered a component of economic forecasting?

• A. Seasonality
• B. Trend
• C. Random variation
• D. Opportunity cost

Answer: (D)

Verified step by step guidance

1. Understand that economic forecasting involves analyzing patterns in economic data to predict future values. The main components typically considered are Trend, Seasonality, and Random variation.
2. Define each component: Trend represents the long-term movement in data, Seasonality captures regular fluctuations within specific periods (like quarters or months), and Random variation accounts for unpredictable, irregular influences.
3. Recognize that Opportunity cost is a concept in economics related to the value of the next best alternative foregone when making a decision, and it is not a statistical component used in forecasting models.
4. Compare the given options and identify that Opportunity cost does not fit as a component of economic forecasting because it is not related to data patterns or time series analysis.
5. Conclude that the correct answer is Opportunity cost, as it is not considered a component of economic forecasting.