Use MegaStat to calculate the probability that the Unemployment rate would reach
ID: 3177916 • Letter: U
Question
Use MegaStat to calculate the probability that the Unemployment rate would reach 12%.
What hypotheses is this test based on? Interpret the results.
Unemployment Rate Data
Year Unemployment Rate 1948 3.75% 1949 6.05% 1950 5.21% 1951 3.28% 1952 3.03% 1953 2.93% 1954 5.59% 1955 4.37% 1956 4.31% 1957 4.30% 1958 6.84% 1959 5.45% 1960 5.54% 1961 6.69% 1962 5.57% 1963 5.64% 1964 5.16% 1965 4.51% 1966 3.79% 1967 3.84% 1968 3.56% 1969 3.94% 1970 4.98% 1971 5.95% 1972 5.60% 1973 4.86% 1974 5.64% 1975 8.48% 1976 7.70% 1977 7.05% 1978 6.07% 1979 5.85% 1980 7.18% 1981 7.62% 1982 9.71% 1983 9.60% 1984 7.51% 1985 7.19% 1986 7.00% 1987 6.18% 1988 5.49% 1989 5.26% 1990 5.62% 1991 6.85% 1992 7.49% 1993 6.91% 1994 6.10% 1995 5.59% 1996 5.41% 1997 4.94% 1998 4.50% 1999 4.22% 2000 3.98% 2001 4.76% 2002 5.78% 2003 5.99% 2004 5.57% 2005 5.10% 2006 4.60% 2007 4.60% 2008 5.80% 2009 9.30% 2010 9.60% 2011 8.90% 2012 8.10% 2013 7.40% 2014 6.20% 2015 5.29% 2016 4.90%Explanation / Answer
we can provide solution using the open source stats package R , the complete R snippet is as follows
##########
# read the data into R dataframe
data.df<- read.csv("C:\Users\586645\Downloads\Chegg\unemployement.csv",header=TRUE)
str(data.df)
t.test(data.df$Unemployment.Rate,mu=0.12)
###########
Basically we want to conduct a t test to check if the average unemployment rate = 12%
so we formulate the hypothesis as
H0 : The unemployement rate is equal to 12 %
H1 : The unemployement rate is not equal to 12 %
The results are
> t.test(data.df$Unemployment.Rate,mu=0.12)
One Sample t-test
data: data.df$Unemployment.Rate
t = -31.306, df = 68, p-value < 2.2e-16
alternative hypothesis: true mean is not equal to 0.12
95 percent confidence interval:
0.05494223 0.06273893
sample estimates:
mean of x
0.05884058
as the p value of the test is less than 0.05 , hence we reject the null hypothesis and conclude that the average employement rate is not 0.12
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