Economist A.W. Phillips was one of the first economists to present compelling evidence of the correlation between unemployment and wage inflation. Since wages and salaries are a major input cost for companies, rising wages should lead to higher prices for products and services in an economy, ultimately pushing the overall inflation rate higher. As a result, Phillips graphed the relationship between general price inflation and unemployment, rather than wage inflation. Data on unemployment (independent) and inflation (dependent) from the Federal Reserve is on the Excel workbook. a) Find the equation for the regression line for this data. b) Find the correlation coefficient and R?. c) Using the data, is the correlation statistically significant at the 1% level?
Economist A.W. Phillips was one of the first economists to present compelling evidence of the correlation between unemployment and wage inflation. Since wages and salaries are a major input cost for companies, rising wages should lead to higher prices for products and services in an economy, ultimately pushing the overall inflation rate higher. As a result, Phillips graphed the relationship between general price inflation and unemployment, rather than wage inflation. Data on unemployment (independent) and inflation (dependent) from the Federal Reserve is on the Excel workbook. a) Find the equation for the regression line for this data. b) Find the correlation coefficient and R?. c) Using the data, is the correlation statistically significant at the 1% level?
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
Related questions
Question
| FRED Graph Observations | |||
| Federal Reserve Economic Data | |||
| https://fred.stlouisfed.org/graph/?g=3obN | |||
| Observation date | Unemployment Rate | Inflation Rate | |
| 1 | 1960-01-01 | 5.2 | 1.2 |
| 2 | 1961-01-01 | 6.6 | 1.6 |
| 3 | 1962-01-01 | 5.8 | 0.7 |
| 4 | 1963-01-01 | 5.7 | 1.3 |
| 5 | 1964-01-01 | 5.6 | 1.6 |
| 6 | 1965-01-01 | 4.9 | 1.1 |
| 7 | 1966-01-01 | 4.0 | 1.9 |
| 8 | 1967-01-01 | 3.9 | 3.2 |
| 9 | 1968-01-01 | 3.7 | 3.6 |
| 10 | 1969-01-01 | 3.4 | 4.7 |
| 11 | 1970-01-01 | 3.9 | 6.2 |
| 12 | 1971-01-01 | 5.9 | 5.3 |
| 13 | 1972-01-01 | 5.8 | 3.3 |
| 14 | 1973-01-01 | 4.9 | 3.6 |
| 15 | 1974-01-01 | 5.1 | 9.6 |
| 16 | 1975-01-01 | 8.1 | 11.8 |
| 17 | 1976-01-01 | 7.9 | 6.7 |
| 18 | 1977-01-01 | 7.5 | 5.2 |
| 19 | 1978-01-01 | 6.4 | 6.8 |
| 20 | 1979-01-01 | 5.9 | 9.3 |
| 21 | 1980-01-01 | 6.3 | 13.9 |
| 22 | 1981-01-01 | 7.5 | 11.8 |
| 23 | 1982-01-01 | 8.6 | 8.3 |
| 24 | 1983-01-01 | 10.4 | 3.7 |
| 25 | 1984-01-01 | 8.0 | 4.3 |
| 26 | 1985-01-01 | 7.3 | 3.5 |
| 27 | 1986-01-01 | 6.7 | 4.0 |
| 28 | 1987-01-01 | 6.6 | 1.4 |
| 29 | 1988-01-01 | 5.7 | 4.1 |
| 30 | 1989-01-01 | 5.4 | 4.5 |
| 31 | 1990-01-01 | 5.4 | 5.2 |
| 32 | 1991-01-01 | 6.4 | 5.6 |
| 33 | 1992-01-01 | 7.3 | 2.7 |
| 34 | 1993-01-01 | 7.3 | 3.3 |
| 35 | 1994-01-01 | 6.6 | 2.5 |
| 36 | 1995-01-01 | 5.6 | 2.9 |
| 37 | 1996-01-01 | 5.6 | 2.8 |
| 38 | 1997-01-01 | 5.3 | 3.0 |
| 39 | 1998-01-01 | 4.6 | 1.6 |
| 40 | 1999-01-01 | 4.3 | 1.7 |
| 41 | 2000-01-01 | 4.0 | 2.8 |
| 42 | 2001-01-01 | 4.2 | 3.7 |
| 43 | 2002-01-01 | 5.7 | 1.2 |
| 44 | 2003-01-01 | 5.8 | 2.8 |
| 45 | 2004-01-01 | 5.7 | 2.0 |
| 46 | 2005-01-01 | 5.3 | 2.8 |
| 47 | 2006-01-01 | 4.7 | 4.0 |
| 48 | 2007-01-01 | 4.6 | 2.1 |
| 49 | 2008-01-01 | 5.0 | 4.3 |
| 50 | 2009-01-01 | 7.8 | -0.1 |
| 51 | 2010-01-01 | 9.8 | 2.6 |
| 52 | 2011-01-01 | 9.1 | 1.7 |
| 53 | 2012-01-01 | 8.3 | 3.0 |
| 54 | 2013-01-01 | 8.0 | 1.7 |
| 55 | 2014-01-01 | 6.6 | 1.6 |
| 56 | 2015-01-01 | 5.7 | -0.2 |
| 57 | 2016-01-01 | 4.8 | 1.2 |
| 58 | 2017-01-01 | 4.7 | 2.5 |
| 59 | 2018-01-01 | 4.0 | 2.1 |
| 60 | 2019-01-01 | 4.0 | 1.5 |
| 61 | 2020-01-01 | 3.5 | 2.5 |
| 62 | 2021-01-01 | 6.3 | 1.4 |
Please show the excel formulas.
Transcribed Image Text:Economist A.W. Phillips was one of the first economists to present compelling evidence
of the correlation between unemployment and wage inflation. Since wages and salaries
are a major input cost for companies, rising wages should lead to higher prices for
products and services in an economy, ultimately pushing the overall inflation rate higher.
As a result, Phillips graphed the relationship between general price inflation and
unemployment, rather than wage inflation. Data on unemployment (independent) and
inflation (dependent) from the Federal Reserve is on the Excel workbook.
a) Find the equation for the regression line for this data.
b) Find the correlation coefficient and R?.
c) Using the data, is the correlation statistically significant at the 1% level?
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