ECON 1 Lecture Notes - Lecture 15: Aggregate Supply, Futures Contract, Local Marketing Agreement
Document Summary
Chapter 9 forecasting forecast: an estimate of the future level of some variable. Common variables that are forecasted include demand levels, supply levels, and prices. Demand forecasts: distinguish between overall market demand and firm-level demand, once firms have accurately forecasted this firm-level demand, they can begin to plan their business activities accordingly. Supply forecasts: might provide information on: the number of current producers and suppliers, projected aggregate supply levels technological and political trends that might affect supply. Law 1: forecasts are almost always wrong (but they are still useful) No forecasting approach can predict the exact level of future demand, supply, or price. Law 2: forecasts for the near term trend to be more accurate. In the near term, the factors that affect the forecast variable are not likely to change greatly. Law 3: forecasts for groups of products or service tend to be more accurate.
