Which of the following is not a technical forecasting approach? Select one: o a.
ID: 1174542 • Letter: W
Question
Which of the following is not a technical forecasting approach? Select one: o a. Moving Averages b. Relative Strength Index c. Balance of Payments Model O d. Eliott Wave Theory e. Gann Numbers The statement that 'existence of barriers in the form of tariffs, quotas, and labor immobility provides favorable/ unfavorable business environment is advocated by supporters of Select one: a, the theory of product cycle b. the theory of imperfect market c. none of the choices is correct d. the theory of linear optimization e. the theory of comparative advantage OExplanation / Answer
The answer to the first question is option C (c)
Out of these, Balance of Payments (B.O.P.) Method is not a technical forecasting approach.
Balance of Payments: This is a macro-economic indicator of a particular country/economy. It documents all the monetary transactions that a country and its residents (government bodies, individuals, and companies) are carrying out with other economies and rest of the world. The transactions include any kinds of import or export of goods and services, capital transactions and also transfer payments. It consists of broadly two accounts: the current account and the capital account. Current account deals with all kinds of goods and services, current transfers and any type of income from investments, whereas the Capital account summarizes all the financial instrument transactions and the central bank reserves.
On the other hand, the rest of the four options are technical analysis forecasting approaches or tools which are used to forecast the futuristic financial price movements for tradable instruments, with reference to the past price movements. Some of the tradable instruments are futures, indices, commodities, stocks etc.). It provides a clear picture of the supply and the demand of these tradable instruments.
The answer to the second question is Option E (e).
The statement “existence of barriers in the form of tariffs, quotas, and labor immobility provides favorable/unfavorable business environment” is advocated by supporters of the theory of comparative advantage.
The theory of comparative advantage talks about the ways in which a particular country/economy can produce goods and services for a lower opportunity cost in comparison to the other countries/economies. Considering an example, suppose if any country has the resource of raw material of a particular product in abundance, then the tariffs will be comparatively less for them to produce it. In this case, it becomes very obvious for this country to have a comparative advantage over other countries.
Similarly, the availability of cheap labor can attract more labor intensive businesses in a country, which also creates a comparative advantage over other countries.
So the comparative advantage can be gained by overcoming the barriers to achieve a favorable business environment. In contrary to this, different trade barriers cause loss of comparative advantage which leads to an unfavorable business environment.
On the other hand, the other three theories explain the following:
The theory product cycle talks about the lifespan and the stages of a product from its launch till discontinuity.
The theory of imperfect market explains about the imperfect competition created because of large number of buyers and sellers, non availability of identical products/substitutes, control over selling force, free entry and exit and monopolistic competition.
The theory of linear optimization is a mathematical model which helps to derive the best outcome in the form of either, maximum profit or minimum cost.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.