In: Economics
a. when one talks about hypothesis , one usually means a mere assumption or some supposition to be proved or disapproved. For a researcher hypothesis is a formal question that he intends to resolvve. thus hypothesis is defined as proposition or a set of proposition set forth as an explanation for the occurance of some specified group of phenomena either asserted merely as a provisional conjecture to guide some investigation or accepted as highly probable in the light of established facts.Hypothesis is a predictive statement,capable of being tested by scientific methods, thta relates an independent variable to some dependent variable.
b. Regarding developement of hypothesis we have to consider the folowing facts:
1.if hypothesis is not clear and precise the inference drawn on its basis cannot be taken. so the first fact should be that hypothesis should be clear and it should state relationships between variables, if it happens to be a relational hypothesis.
2.hypothesis should be capable of being tested and it should be limited in scope and must be specific. A researcher must remember that narrower hypothesis are generally more testable. Hypothesis should be consistent with most known facts, i.e, it must be consistent with a substancial body of established facts.
3. hypothesis should be stated as far as possible in most simple terms so that the same is understandable by all concerned but the simplicity of hypothesis has nothing to do with its significance. one should not use an excellent hypothesis, however, one should be amenable to testing within a reasonable time.
4.hypothesis must explain the facts that give rise to need of explanation that is it means by using hypothesis and other known and known and accepted generalizations, one should be able to deduce the original problem condition or it should have a emperical refernce.
c.sampling theory is a study of relationships existing between a population and samples drawn from the population. this theory is applicable only to random samples. the theory of sampling studies rhe relationships that exists between the universe and the sample or samples drawn from it.However, the main probelm of sampling theoy is the problem of relatipnship between a parameter and a statistic. the theory of sampling is concerned with estimating the properties of the ppulation from those of the sample and also gauging the precision of estimate. sampling theory is designed to attain one or more following obejctives-1.statistical estimate 2. testing of hypotheses 3. statistical inference.
EXPANDING FAMILY INCOME ENABLES A RISE IN PERCENTAGE OF INCOME SAVED
household saving is defined as income that is not consumed. Savings can be kept in cash, as a bank account or saved in long term assets such as government bonds. some of the factors that influence saving when family income expands:
1.high interest rate enables families to save more and even rising income enables higher saving beacuse people on very low income cannot afford the luxury of saving.
2. the age of individuals that is the people in their 40s or 50s tend to save more for retirement. rising income levels within the family will lead to a rise in total savings level. As households gain more disposable income and have the ability to save more. UK hosehold saving ratio appears to be cyclical.however the economic cycle has a clear effect on savings ratio- during a recession the savings ratio rises and it falls during a growth.
3.typically households on low income levels will have low savings level because they need to buy the necessities and donot have the luxury to save, so we can say as the family income expands, there is a more tendency to save. as incomes rise households have a tendency to have a higher marginal propensity to save. this is because with higher incomes there is a diminishing marginal utility to consumption-households with extra income are more likely to save. if there is rise in income of the low paid, this will have a bigger impact on increasing savings than if there is a rise in incomes of wealthy. a reduction in inequality can increase savings levels.
4. aong with the income exoansion of the family, confidence plays a major role. if the confidence and expectation is low , then it is an incentive to save for unexpected problems. factors that will influence economic confidence are closely related to current economic climate, for example, rate of economic economic growth, unemployment levels, house prices.