1.) Listed below are the number of deaths in the United States resulting from motor vehicle crashes.

a.) Create a scatterplot in StatCrunch and draw a sketch of it. Make sure to label the x and y axis.

b.) Find the correlation coefficient, rounded to four decimal places.

c.) Find the equation of the line of best fit.

d.) Is the correlation significant? Explain why or why not.

e.) Predict the number of deaths from motor vehicle crashes in 2015.

f.) In 2015 there were actually 32,999 deaths from motor vehicle crashes. Is your above estimate close to the actual result?

g.) Predict the number of deaths from motor vehicle crashes in 2140. Is this result reasonable?

Year 1975 1980 1985 1990 1995 2000 2005 2010

Deaths 44,525 51,091 43,825 44,599 41,817 41,945 43,443 32,708

6. Assume that annual interest rates are 5 percent in the United States and 4 percent in Turkey. An FI can borrow (by issuing CDs) or lend (by purchasing CDs) at these rates. The spot rate is $0.6624/Turkish lira (TL).

a. If the forward rate is $0.6735/TL, how could the bank arbitrage by using a sum of $5 million? What is the spread earned?

b. At what forward rate is this arbitrage eliminated?

President Calvin Coolidge once exclaimed that "the business of the United States IS business." When considering life in the US today, one cannot deny the observation. Even education and prison has become a business industry. The business-oriented nature of the US did not happen overnight and goes back to the very origins of the US. Considering this, (a) explain the origins of the original two colonies, Jamestown and Plymouth. Explain how they fulfilled mercantilist objectives on the part of the English Crown. Also, (b) how did African slavery originate from business purposes? Finally, (c) how was the Civil War a result of economic factors regarding industrialization and slavery?

A random survey of enrollment at community colleges across the United States yielded the following figures: 7681; 3200; 17500; 9200; 7380; 18314; 6557; 13713;. Assume the underlying population is normal. Construct a 95% confidence interval for the population mean enrollment at community colleges in the United States.

What is the lower bound of the confidence interval?

Question 1 options:

Question 2 (1 point)

What is the sample mean?

Question 2 options:

Question 3 (1 point)

What is the upper bound of the confidence interval?

Question 3 options:

Question 4 (1 point)

What is the sample standard deviation?

Question 4 options:

Question 5 (1 point)

What is the correct conclusion?

Question 5 options:

Question 6 (1 point)

What is the error bound margin?

Question 6 options:

Question 7 (1 point)

What is the sample size?

Question 7 options:

Question 8 (1 point)

What is the confidence level for the interval?

Question 8 options:

Scenario 2

A random survey of enrollment at community colleges across the United States yielded the following figures: 4300; 5944; 5722; 2825; 2044; 5481; 5200; 5853; 2750; 10012; 6357; 27000; 9414; 7681; 3200; Assume the underlying population is normal. Construct a 90% confidence interval for the population mean enrollment at community colleges in the United States.

Question 9 (1 point)

What is the sample size?

Question 9 options:

Question 10 (1 point)

What is the lower bound of the confidence interval?

Question 10 options:

Question 11 (1 point)

What is the sample standard deviation?

Question 11 options:

Question 12 (1 point)

What is the correct conclusion?

Question 12 options:

Question 13 (1 point)

What is the error bound margin?

Question 13 options:

Question 14 (1 point)

What is the sample mean?

Question 14 options:

Question 15 (1 point)

What is the confidence level for the interval?

Question 15 options:

Question 16 (1 point)

What is the upper bound of the confidence interval?

Question 16 options:

Smith Co. operates business in the United States and New Zealand. In attempting to assess its economic exposure, it compiled the following information.

      i.    Smith’s U.S. sales are slightly influenced by the New Zealand dollar (NZ$) value, due to confronts rivalry from New Zealand exporters. It estimates the U.S. sales based on the following three exchange rate scenarios:

                                                                               Revenue from U.S. Business

                        Exchange Rate of NZ$                             (in millions)

                                   NZ$ = $.48                                              $100

                                   NZ$ =   .50                                                105

                                   NZ$ =   .54                                                110

      ii.    Revenues for Smith Co. in New Zealand dollars are projected to be NZ$600 million.

      iii.   Cost of goods sold is projected at $60 million from the U.S. materials purchase and NZ$100 million from the New Zealand materials purchase.

      iv.  Fixed operating expenses are valued at $30 million.

v.   Variable operating expenses are projected at 20 percent of total sales (after including New Zealand sales, translated to a dollar amount).

vi.  Interest expense is projected at $20 million on prevailing U.S. loans, and the company has no existing New Zealand loans.

Questions:

1. Generate a forecasted income statement for Smith Co. under each of the three exchange rate scenarios.                                                               

Also answer the following questions based on the rubric.                     

2. Discuss how Smith’s projected earnings before taxes are influenced by the vital of exchange rate forecasting. Justify your viewpoints.                                                    

Describe how Smith Co. can restruc­ture its operations to minimize the earnings sensitivity to the degree of exchange rate movements without reducing its business volume in New Zealand.

Obesity is a growing problem in the United States. Many policy makers think ways to fight the problem: taxes on sugar and advertising limits on sugar-laden goods as ways to reduce the consumption of these goods. Which do you think is more effective? Discuss the likely effects of each policy (tax vs. advertising limit) on the consumption of sugar-laden goods, social benefits, and social costs. Support your argument with examples and evidence.

Assume that United States residents invest heavily in the Australian government and stocks. In addition, Australian residents invest heavily in the United States. Because your firm imports goods from Australia, you are assigned to forecast the value of AUD (the Australian dollar) against the USD – i.e., you forecast St(AUDUSD). Explain how each of the following conditions will affect the value of the AUD, holding other things equal. Then, aggregate all of these impacts to develop an overall forecast of the AUD’s movement against the USD. (Please plot a figure to explain each condition, except for question f. No figures, no points.)

a. U.S. inflation has suddenly increased substantially, while Australian inflation remains low.

b. The U.S. interest rates have increased substantially, while the Australian interest rates remain the same.

c. The income level in the U.S. increased substantially, while the Australian income level has remained unchanged.

d. The U.S. is expected to impose a new small tariff on goods imported from Australia.

e. In Australia, the recent dysfunction within the two major political parties has seen seven different Prime Ministers take office in the past decade. You expect that this situation may be going to get worse and assume Australia is not a safe haven.

f. Combine all expected impacts to develop an overall forecast.

Exhibit:    Totals Recorded for the United States    (billions of dollars)*

Durable goods consumption $ 497

Nondurable goods consumption 1,301

Services consumption 2,342

Business fixed investment 566

Residential fixed investment 224

Inventory investment 7

Federal government purchases 449

State and local government purchases 683

Exports 640

Imports 670

Excess of GNP over GDP 7

Depreciation 658

Indirect business taxes 551

Corporate profits (includes wage accruals less disbursements) 387

Social insurance contributions 556

Net interest 442

Dividends (includes business transfer payments) 162

Government transfers to individuals 837

Personal interest income 694

Personal tax and nontax payments 645

What were the approximate ratios of consumption, investment, and government purchases to GDP?