The accompanying table shows a portion of monthly data on seasonally adjusted inflation and unemployment rates in the United States from January 2009 to November 2010; the entire data set is on the text website, labeled Unemployment and Inflation.
a. Use a 3-period moving average and exponential smoothing with α = 0.6 to make in-sample forecasts for unemployment. Use the more appropriate smoothing method to forecast unemployment for December 2010.
b. Use a 3-period moving average and exponential smoothing with α = 0.6 to make in-sample forecasts for inflation. Use the more appropriate smoothing method to forecast inflation for December 2010.