# Question: Economists often make forecasts of future conditions Consider the U S

Economists often make forecasts of future conditions. Consider the U.S. unemployment rate for June 2010 as predicted in December 2009 as part of a survey of economists, as shown in Table 8.6.4.

a. Find the average and the standard deviation. Briefly interpret these values.

b. Find the standard error of the average. Interpret this number carefully, by viewing this list as a random sample from a much larger list of economists that might have been selected.

c. Six months after these predictions were made, the actual unemployment rate17 was recorded as 9.5%. Compare the average forecast to this actual outcome.

d. How many standard errors away from the sample average is the actual outcome (9.5%)? Would you ordinarily be surprised by such an extreme difference?

e. Explain why the forecast error (average forecast minus actual outcome) need not be approximately equal in size to the standard error. Do this by identifying the population mean and showing that the actual outcome is not the same object.

QUESTION CONTINUE TO NEXT PAGE…..

a. Find the average and the standard deviation. Briefly interpret these values.

b. Find the standard error of the average. Interpret this number carefully, by viewing this list as a random sample from a much larger list of economists that might have been selected.

c. Six months after these predictions were made, the actual unemployment rate17 was recorded as 9.5%. Compare the average forecast to this actual outcome.

d. How many standard errors away from the sample average is the actual outcome (9.5%)? Would you ordinarily be surprised by such an extreme difference?

e. Explain why the forecast error (average forecast minus actual outcome) need not be approximately equal in size to the standard error. Do this by identifying the population mean and showing that the actual outcome is not the same object.

QUESTION CONTINUE TO NEXT PAGE…..

## Answer to relevant Questions

Here is a list of the dollar amounts of recent billings: a. Find the average sale. What does this number represent? b. Find the standard deviation. What does this number represent? c. Find the standard error. What does this ...Based on careful examination of a sample of size 868 taken from 11,013 inventory items in a warehouse, you learn that 3.6% are not ready to be shipped. a. Find the standard error associated with this estimated percentage and ...Draw a random sample without replacement of 10 employees, using the table of random digits, starting in row 23, column 7. a.* List the employee numbers for your sample. b. Find the average salary for your sample and ...1. Do you agree that drawing a second sample was a good idea? 2. Do you agree that the follow-up mailings were a good idea? 3. How might you explain differences among averages in the results? 4. Are there useful results ...a. What confidence levels other than 95% are in common use? b. What would you do differently to compute a 99% confidence interval instead of a 95% interval? c. Which is larger, a two-sided 90% confidence interval or a ...Post your question