The Following Data Are Believed to Have Come from a Normal

question 67

Essay

The following data are believed to have come from a normal probability distribution. $$\begin{array} { | r | r | r | r | r | r | r | r | r | r | } \hline 26 & 21 & 25 & 20 & 21 & 29 & 26 & 23 & 22 & 24 \\\hline 24 & 30 & 23 & 32 & 26 & 24 & 32 & 16 & 36 & 26 \\\hline 21 & 31 & 26 & 23 & 32 & 35 & 40 & 30 & 14 & 26 \\\hline 46 & 27 & 33 & 25 & 27 & 21 & 26 & 18 & 29 & 36 \\\hline\end{array}$$ The mean of this sample equals 26.80, and the standard deviation equals 6.378. Use the goodness-of-fit test at the 5% significance level to test this claim.

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Definitions:

Expected Inflation

The rate at which the general level of prices for goods and services is anticipated to rise.

Absolute Purchasing Power Parity

A theory that suggests that in the absence of transportation and other transaction costs, identical goods in different countries should have the same price when expressed in a common currency.

Exchange Rate

The price of a single currency in terms of another currency.

Relative Purchasing Power Parity

A theory that suggests that changes in the exchange rates between currencies are in proportion to changes in the countries’ price levels.