Chapter 15,17,18 test review Flashcards
hypothesis test that compares an observed frequency distribution to an expected frequency distribution on a nominal or ordinal scale.
Goodness of fit test
What are the three characteristics of a chi square distribution
- Always greater than or equal to zero
- It is a family of distributions based on the degrees of freedom
- They are positively squared.
What are two limitations to the chi square test
- If there are two categories with, they need to have an expected frequency of at least 5
- If there are more than two categories, then at least 20% of them need to have a frequency of more than 5
A number that expresses the relative change in price, quantity, or value compared to a base period.
Index number
Name three characteristics of a of an index
- It is a percent, but the percent is typically left off
- They have either a base or a base period their set against
- Most businesses report to the nearest whole number or 10th
Simple index that averages the price of items at different times
Simple average index
Simple index that sums prices of two periods and bases the index on the totals
Simple aggregate index
Weighted index that uses base-period quantities as weights
Laspeyres
Weighted index that uses current period quantities as weights
Paasche Price
Weighted index that uses the geometric mean of Laspeyres and Paasche indexes
Fishers ideal index
Weighted index that measures changes in both prices and quantities involved
Value index
This special index describes the changes in prices from one period to another for a “market basket” of goods and services
Consumer price index
A special index that reflects the prices of over 3400 commodities. It is a Laspeyres type index
Producer price index
What major functions does the CPI perform
- Illustrates erosion of purchasing power
- Works as a yardstick for revising wages, pensions, and other income
- An economic indicator for the rate of inflation
A persons current buying power compared to buying power of the base period of the index
real income
A collection of historical observations recorded over time that are presented in chronological order.
Time Series analysis
The change of a variable over time
Trend pattern
Patterns of highs and lows in a time series within a calendar year that tend to repeat annually
Seasonality
A pattern of highs and lows occurring over periods of many years. Minimum of 1 year
cyclical pattern
The random variable in a time series referred to as the residual variation
Irregular component
Forecasting technique when a series is stationary and observations are equally weighted
Simple moving average
Forecasting technique when series is stationary and observations are not equally weighted
Exponential smoothing
A value applied in exponential smoothing to determine the weights assigned to past observations. Vale is between 0 and 1
Smoothing constant
The mean of the absolute error is called
The mean absolute deviation or MAD
The sum of the absolute relative (percent) errors
The mean absolute percent error or MAPE
When successive residuals are correlated
Autocorrelation
What is the method of determining the degrees of freedom when using chi square to test for independence on a contingency table
df = (r-1)(c-1)
How to calculate expected frequency on chi square independence test
((row total)*(column total))/grand total
How do you determine the df when using chi sq to test normality
- Population mean and standardiviation are known, k-1
- Population mean is known but standard deviation is estimated, K-2
- When population and deviation are estimated, k-3
used to determine whether two nominal-scaled variables are related
Contingency table analysis
What is the formula for real income
(Money income/CPI)*100
