Implication of the AR(1) Model

In a time-series analysis of monthly sales data for a retail store, you find that the sales figures from previous months show a pattern that is correlated with sales figures from lagged months. To model this relationship, you decide to use an autoregressive model, specifically an AR(1) model. The autoregressive model of order one can be expressed as:

$Y_t = \phi_1 Y_{t-1} + \epsilon_t$

where:

• $Y_t$ is the sales figure at time $t$
• $\phi_1$ is the autoregressive coefficient
• $\epsilon_t$ is a white noise error term

Which of the following statements correctly describes an implication of the AR(1) model?