Chapter 15,17,18 test review

Question 1

hypothesis test that compares an observed frequency distribution to an expected frequency distribution on a nominal or ordinal scale.

Answer 1

Goodness of fit test

Question 2

What are the three characteristics of a chi square distribution

Answer 2

1. Always greater than or equal to zero
2. It is a family of distributions based on the degrees of freedom
3. They are positively squared.

Question 3

What are two limitations to the chi square test

Answer 3

1. If there are two categories with, they need to have an expected frequency of at least 5
2. If there are more than two categories, then at least 20% of them need to have a frequency of more than 5

Question 4

A number that expresses the relative change in price, quantity, or value compared to a base period.

Answer 4

Index number

Question 5

Name three characteristics of a of an index

Answer 5

1. It is a percent, but the percent is typically left off
2. They have either a base or a base period their set against
3. Most businesses report to the nearest whole number or 10th

Question 6

Simple index that averages the price of items at different times

Answer 6

Simple average index

Question 7

Simple index that sums prices of two periods and bases the index on the totals

Answer 7

Simple aggregate index

Question 8

Weighted index that uses base-period quantities as weights

Answer 8

Laspeyres

Question 9

Weighted index that uses current period quantities as weights

Answer 9

Paasche Price

Question 10

Weighted index that uses the geometric mean of Laspeyres and Paasche indexes

Answer 10

Fishers ideal index

Question 11

Weighted index that measures changes in both prices and quantities involved

Answer 11

Value index

Question 12

This special index describes the changes in prices from one period to another for a “market basket” of goods and services

Answer 12

Consumer price index

Question 13

A special index that reflects the prices of over 3400 commodities. It is a Laspeyres type index

Answer 13

Producer price index

Question 14

What major functions does the CPI perform

Answer 14

1. Illustrates erosion of purchasing power
2. Works as a yardstick for revising wages, pensions, and other income
3. An economic indicator for the rate of inflation

Question 15

A persons current buying power compared to buying power of the base period of the index

Answer 15

real income

Question 16

A collection of historical observations recorded over time that are presented in chronological order.

Answer 16

Time Series analysis

Question 17

The change of a variable over time

Answer 17

Trend pattern

Question 18

Patterns of highs and lows in a time series within a calendar year that tend to repeat annually

Answer 18

Seasonality

Question 19

A pattern of highs and lows occurring over periods of many years. Minimum of 1 year

Answer 19

cyclical pattern

Question 20

The random variable in a time series referred to as the residual variation

Answer 20

Irregular component

Question 21

Forecasting technique when a series is stationary and observations are equally weighted

Answer 21

Simple moving average

Question 22

Forecasting technique when series is stationary and observations are not equally weighted

Answer 22

Exponential smoothing

Question 23

A value applied in exponential smoothing to determine the weights assigned to past observations. Vale is between 0 and 1

Answer 23

Smoothing constant

Question 24

The mean of the absolute error is called

Answer 24

The mean absolute deviation or MAD

Question 25

The sum of the absolute relative (percent) errors

Answer 25

The mean absolute percent error or MAPE

Question 26

When successive residuals are correlated

Answer 26

Autocorrelation

Question 27

What is the method of determining the degrees of freedom when using chi square to test for independence on a contingency table

Answer 27

df = (r-1)(c-1)

Question 28

How to calculate expected frequency on chi square independence test

Answer 28

((row total)*(column total))/grand total

Question 29

How do you determine the df when using chi sq to test normality

Answer 29

1. Population mean and standardiviation are known, k-1 2. Population mean is known but standard deviation is estimated, K-2 3. When population and deviation are estimated, k-3

Question 30

used to determine whether two nominal-scaled variables are related

Answer 30

Contingency table analysis

Question 31

What is the formula for real income

Answer 31

(Money income/CPI)*100