Question

The ratio-to-trend method is useful... (a) to capture the time trend (b) to adjust for seasonal variations (c) to capture random fluctuations (d) to control for secular cycles

Answer 1

Answer: to adjust for seasonal variation

Ratio to trend method is based on time series multimodel. Using Ratio to Trend we calculate seasonal variation. After calculating the seasonal variation we will remove the impact of it on the time series. The result obtained after elimination of seasonal variation on time series is called as seasonally adjusted time series. So using Ratio to Trend method we can remove seasonal variation impact on time series.