Cypress River Landscape Supply is a larege wholesale supplier of landscaping materials in Gerogia. Cypress River’s sales vary seasonally; sales tend to be higher in the spring months than in other months.
a. Suppose Cypress RIver estimates a linear trend without accounting for this seasonal variation. What effect wouls this commiosn have on the estimated sales trend?
b. Alternatively, suppose there is, in fact, no seasonal pattern to sales and the trend line is estimated using dummy variables to account for seasonality. What effect would this have on estimation?
