Question: The monthly unemployment rates in Zamunda for 1999-2004 are given in the Unemployment.xls data file.

1. Plot the time series.
2. Describe the time series in terms of trend, seasonal, cyclic and irregular components
3. Compute 5-period moving averages.
4. Plot the moving averages.
5. Does the plot in part (d) provide evidence in support of your description in part (b)?
6. You computed 5-period moving averages in part (c).
   1. What is the implication of using 2-period moving averages instead?
   2. What is the implication of using 7-period moving averages instead?
      Note: No need to re-compute moving averages. Discuss what happens (in relation to 5-period moving averages) when 2-period and 7-period moving averages are used.
7. Estimate a linear trend line and compute seasonal indexes.
8. Hence (using information in part (g), forecast unemployment rate for each month of 2005.

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