The council of Economic Advisers (CEA) is conducting a study to estimate the ave

Question

The council of Economic Advisers (CEA) is conducting a study to estimate the average earned income tax credit (EITC) for households that receive one. The study researcher desires a $150 margin of error at 90% confidence. The population standard deviation is unknown, so a best guess is used as the planning value for o The CEA estimates that the smallest credit received in the pop Lisbon of households that receive an EITC is $1, and the largest credit received Is $4,716 (the maximum credit for a famity with two or more children in 2007). A rough approximation of the population standard deviation is Use the Distributions tool to help to answer the question that follows

Explanation / Answer

Range=maximum-minimum =4716-1=4715

Standard deviation =4715/4=1178.75

Rough approximation of population Sd= 1178.75

Z value for 90% CI =1.645

Margin of error = z*sd/sqrt(n)

150=1.645*1178.75/sqrt(n)

Sqrt(n) = 1.645*1178.75/150

Sqrt(n) =12.92696

n=167.1

The sample size required =168 ( rounded)

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