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Answered Same Day Dec 23, 2021

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David answered on Dec 23 2021

118 Votes

Answer to 2A:
(2a-i):
The unemployment rate during great recession is determined
Null hypothesis: GREATRECESSION= 0.30
Alternative hypothesis: GREATRECESSION<0.30 [left tailed test]
t- statistics:
t =

= (0.275893-0.30)/0.117321
= -0.205
Using t-table critical value at 5% level of significance with 422 (=427-5) degree of
freedom:
t0.05, 422 = -1.645 approx.
So the critical region is P(t<-1.645)
Since the t-statistic do not lie in this region so we do not reject the null hypothesis
and conclude that unemployment rate during great recession indeed went up by
0.30.
(2a-ii):
The relationship between National and California unemployment rates did not
change during the great recession. If we look at the past behavior of these two
unemployment rates [refer the given figure], we find that both are moving in the
same direction (i.e. if one is falling, the other is also falling and if one is increasing,
the other is also increasing). Also the unemployment rate in California has always
een greater than National unemployment rate. The same trend was observed
during the great recession as well i.e. both were moving in same direction and
unemployment in California was higher than National unemployment rate. Hence
we conclude that the...

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