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    Forecasting a Gross Domestic Product

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    The gross domestic product (GDP) of the United States from 1993 to 2004 is given in the table below. The numbers are in billions of U.S. dollars.
    Year GDP ($Billions)
    1993 6,657
    1994 7,072
    1995 7,398
    1996 7,817
    1997 8,304
    1998 8,747
    1999 9,268
    2000 9,817
    2001 10,128
    2002 10,487
    2003 11,004
    2004 11,680
    a) Develop forecasts for the GDP of 2005 using exponential smoothing with smoothing constants of 0.4 and 0.6. (Assume the forecast is $6,650 for 1993)
    b) Which of these models has the lowest mean absolute deviation.

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    Solution Summary

    The solution discusses forecasting for a gross domestic product. Which model has the lowest mean absolute deviation is determined.

    $2.19

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