It is now time to take your work from Data Analysis and see how you can turn some data into some information. More specifically, you are to answer the following questions based on the data below.
1. How much of the change in state support of RIU between 1988 and 1992 could be explained by changes in the state budget (general revenue)?
In 1988 RIU accounted for 5.2 percent of the state budget (revenues). If it had retained that share of the budget in 1992, State Appropriation to RIU would have been $89,102- approximately $32,000 more than it actually received.
2. If we set 1982, the end of the national recession, as the base year, what would the index of State Appropriations to Higher Education be in 1989?
In this problem we would simply divide each number in the Appropriations column by the 1982 figure ($82,829) which would give us 1.58 [132,582/82,829]
3. What would state appropriations to RIU be in 1996 if their share of the state budget for the entire period had remained at its 1990 level?
In 1990 RIU accounted for 4.6 percent of the state budget (revenues). If it had retained that share of the budget in 1996, State Appropriation to RIU would have been $$79,446 [.046*1706683].
4. What happened to the share of state spending on RIU between 1990 and 1996?
In 1990 RIU accounted for 4.6 percent of the state budget (69331/1489371) and in 1996 it had fallen to 3.7 percent (63789/1706683). This is a decline of 20 percent (3.7-4.6)/4.6 = -.2 = -20 percent
5. What happened to the real level of state spending on RIU between 1982 and 1988?
In 1982 real state appropriations (nominal/prices) was $45,688 (44317/82)*100 and $54,693 (64537/1239341)*100 in 1988. This is an increase of 20 percent (54693-45688)/45688 = .2 = 20 percent
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YEAR |
RIU STATE |
TOTAL STATE |
HIGHER EDUCATION |
CPI
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APPROPRIATIONS |
GENERAL REVENUE |
STATE APPROPRIATIONS |
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1980 |
$39,509 |
$675,386 |
$72,721 |
$82 |
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1981 |
$42,058 |
$756,452 |
$76,074 |
$91 |
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1982 |
$44,317 |
$821,247 |
$82,829 |
$97 |
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1983 |
$47,662 |
$867,977 |
$89,149 |
$100 |
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1984 |
$49,612 |
$901,640 |
$94,279 |
$104 |
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1985 |
$53,842 |
$972,577 |
$101,822 |
$108 |
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1986 |
$57,379 |
$1,052,435 |
$107,341 |
$110 |
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1987 |
$60,869 |
$1,129,084 |
$113,270 |
$114 |
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1988 |
$64,537 |
$1,239,341 |
$122,691 |
$118 |
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1989 |
$68,671 |
$1,392,276 |
$130,963 |
$124 |
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1990 |
$69,331 |
$1,489,371 |
$132,582 |
$131 |
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1991 |
$62,561 |
$1,446,412 |
$120,382 |
$136 |
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1992 |
$56,629 |
$1,711,078 |
$110,855 |
$140 |
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1993 |
$57,123 |
$1,615,738 |
$112,656 |
$145 |
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1994 |
$59,452 |
$1,530,926 |
$117,294 |
$148 |
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1995 |
$62,915 |
$1,640,985 |
$127,094 |
$152 |
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1996 |
$63,789 |
$1,706,683 |
$128,727 |
$159 |
6. It is important to look at economic variables from both an absolute and relative perspective. In the xerox package you were given a set of graphs designed to assess RI's economic performance. In the package there is a page of graphs on RI and US unemployment rates. The graph of RI's relative unemployment rate (RI/US) is negatively sloped for much of the 1980s. Based on the data contained in the graphs on that page, the best explanation of this patterns would be that:
The only possibility to explain why (RI/US) falls would be to look at what happens to the two of the rates over time. This means b and c are out because these only let me know if the ratio is >1 or <1. Of the other two options, the ratio will fall if the RI rate (numerator) fell faster than the US rate(denominator). The problem is that the decline could also be caused by a rise in the RI rate that was slower than the rise nationally or RI fell while the US rose. When we collapse the two data points (RI rate and US rate) into one point (RI/US) we lose some information.
7. One of the issues that economists debate is the inflation-unemployment tradeoff. For now let us assume that there is evidence of a negative relationship between the level of unemployment and the inflation rate: as the inflation rate increases we see a decrease in the unemployment rate. This is a relationship that holds for Germany as well as the US. The major difference between the two countries is that in Germany the increase in the inflation rate resulting from any decrease in the unemployment rate is larger than it is in the US. Which of the following diagrams best represents this phenomenon.
We know because the rel;ationship is negative that the last graph is out, so now we need to look at the other three. In fact we need to look at the slope which measures the rate of change - how responsive inflation is to a change in the unemployment rate. What you know from your math is that the steeper slope (G in the first graph) means that there is a bigger change in i for any change in U. In the second graph inflation responds more to changes in inflation in the US (steeper curve) while in the last one the slopes / responsiveness is the same. The graph that goes with the words is A.
8. Any reduction in the supply which increases the price of oil is forecast to have a minimal impact on the level of oil consumption in the US, while in Japan consumption is forecast to drop substantially. Which of the set of demand curves below is most likely to be representative of the relationship between the price of oil (P) and consumption of oil (Q) in Japan and the US?
This is the same as the question above. If we follow the logic and change the price of oil (move down), then in the first diagram we see that there is a bigger increase in quantity (Q) when we have the flatter curve which is Japan. This is what we want given the words.
9. The Laffer curve was developed by Arthur Laffer to describe the relationship between tax rates (t) and tax revenue(T). Dr. Laffer hypothesized that tax revenues increased as the tax rate increased up to a certain tax rate. After that tax rate however, tax revenues would fall as the tax rate increased. This relationship is best represented by which of the following graphs.
The third graph is the only graph which follows the story. In the second graph revenue continues to increase as we increase the tax rate, while in the third one we have a negative relationship-revenues decline as the rate increases.
10. If you were trying to overestimate the growth of sales for your company than you would pick a ___ as the starting point and a ____ as the ending point in your analysis.
To overestimate the growth of sales you would pick the lowest point of the cycle (trough) to start with as well as the highest point of the cycle (peak) to end with. Letter D is the correct answer. If you look at the diagram below and picked 5 as the start and 9 as the end, the slope (growth) is greater than if you picked 3 as the start and 11 as the end.
11. A study of the labor supply of rural people in Bangladesh has revealed that there tends to be a positive relationship between the hours worked (L) and the wage rate (W) at low wages but that once the wage rate reaches a certain level the amount of hours worked tends to fall with higher wages. This relationship can best be represented by which of the following graphs.
This is the SAME question as the Laffer curve-but cleverly disguised. According to the story, in Bangladesh the amount of hours worked increases as wages increase, however, after a certain wage is reached, the amount of hours worked tends to fall off even as wages increase. The answer is the third graph.
Which of the following diagrams would best represent the situations described below in the hypothetical surveys?
12. A survey of West German college students attitude towards economic aid to Eastern Germany was recently conducted. In that survey students at 50 universities were asked whether they supported the concept of providing aid to help the current regime weather the tough economic times of conversion to a capitalistic structure. One of the findings of the survey was that the percentage of the school's students who supported the idea of providing aid (x) appeared to be similar for all the schools and unrelated to the school's distance from the former East-West border (y). This result would best be represented in which of the scatter diagrams.
Regardless of where the students lived they had the same attitude towards providing aid for Eastern Germany. That means their attitude was independent of where they lived. Translated to a graph, this would be a vertical graph - the last graph.
13. A survey of college students attitude towards economic aid to the USSR was recently conducted. In that survey students at 50 universities were asked whether they supported the concept of providing aid to help the current regime weather the tough economic times. One of the findings of the survey was that the percentage of the school's students who supported the idea of providing aid (P) was fairly constant across the universities and appeared to be unrelated to average family income at the school(I).
Providing aid should be on the Y axis. Once you know this it is plain to see that the decision to provide aid was static regardless of family income (X). Therefore, the correct answer is letter D.
14. If you were interested in tracking down some data on unemployment rates, which agency would be the best place to find that information?
The unemployment rate describes what is happening in the labor market which is the primary responsibility of the Bureau of Labor Statistics.
15. If you were interested in tracking down some data on GDP, which agency would be the best place to find that information?
GDP is a measure of aggregate output which is the primary responsibility of the Commerce Department.
16. If you were interested in tracking down some data on the prime rate, which agency would be the best place to find that information?
The prime interest rate describes what is happening in the capital market which is the primary responsibility of the Federal reserve Board. One of the best locations for data would be the St. Louis Federal Reserve Bank.
Use the following table to answer the next three questions.
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A |
B |
C |
D |
E |
F |
G |
H |
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1 |
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pop |
<18 |
<25 |
25-64 |
65-74 |
75-84 |
>85 |
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2 |
1970 |
203235 |
69689 |
93403 |
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12443 |
6122 |
1408 |
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3 |
1980 |
226546 |
63754 |
93776 |
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15581 |
7729 |
2240 |
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4 |
1990 |
248710 |
63924 |
90866 |
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18045 |
10012 |
3021 |
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5 |
2000 |
274815 |
70693 |
96810 |
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18258 |
12339 |
4289 |
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6 |
2010 |
298109 |
72063 |
102070 |
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21235 |
12767 |
5702 |
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7 |
2020 |
322602 |
76303 |
105988 |
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37865 |
23592 |
8381 |
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8 |
2030 |
344951 |
80778 |
112053 |
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33678 |
28689 |
13221 |
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9 |
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10 |
1970 |
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11 |
1980 |
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12 |
1990 |
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13 |
2000 |
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14 |
2010 |
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15 |
2020 |
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16 |
2030 |
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17. What formula would you put in cell A2?
We want to subtract from the total population (B2) all those 65 or older ( F2-G2-H2) and those under 25 (D2). Answer b does not work because we double count the people under 18 while answer c is wrong because of the misplaced parentheses.
18. What formula would you put in cell B10 if you wanted a table of population shares for each age and you would use only one formula for the entire table?
The question here is what do we want to anchor when we drag our formula down and across. We want all columns to be divided by the first column so we will anchor the column (letter) in the denominator.
17. What formula would you put in cell B10 if you wanted a table of population indexes for each age bracket. [this is identical to the construction employment example and you would use only one formula for the entire table?
The question here again is what do we want to anchor when we drag our formula down and across. We want all rows to be divided by the first row so we will anchor the row (#) in the denominator.