The residual method is used to measure –

The residual method is a time series decomposition technique used to isolate the cyclical component of data. In this approach, analysts first remove the trend and seasonal variations from the original time series data. The remaining portion of the data, known as the residual, represents the irregular and cyclical movements combined. By further smoothing or analyzing these residuals, statisticians can specifically identify the long-term cyclical fluctuations that are not explained by trend or seasonality. This makes option C (Cyclic fluctuations) the correct answer, as the method is explicitly designed to measure these recurring economic or business cycles. Option A (Trend) and Option D (Seasonal variations) are incorrect because they are the components removed during the process, not what is measured by the residual itself. Option B (Irregular fluctuations) represents random noise which is often separated from cycles, making it less precise than the cyclical interpretation in standard economic analysis.