1. Suppose we have two sets of prediction for the inflation rate for next year: one...

1. Suppose we have two sets of prediction for the inflation rate for next year: one from a random sample of Fortune 500 firms and another from a random sample of university economists. At 0.05 level can it be claimed that on the average university educators are predicting a higher inflation rate for next year than the major private businesses?

Fortune 500 Firms	4.3%	3.8%	6.0%	4.4%	5.1%	5.6%	4.2%	6.1%	4.5%	4.0%
University Economists	4.4%	5.9%	7.0%	5.1%	5.9%	7.2%	6.3%

Formulate the hypothesis (H₀ and H_a) and describe each in nontechnical language and in mathematical form. (5 pts)

Show the mean, rejection region, and the critical value(s) on the following graph. (6 pts)

Show the equation for computing the standard error.

What is your decision and why? (4 pts.)

Provide a conclusion in non-technical language (5 pts)

Expert Solution

orchestra answered 2 years ago

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