) A scholar of urban politics has argued that because the American economy is moving away from a manufacturing-based economy to a service-based economy, unemployment is a problem that plagues cities in the northeast region more severely than cities in the southeast region of the nation.
To test this notion, cities were randomly sampled from both of these regions. Of the 8 cities from the northeast, the average unemployment rate is 9.7 percent with a standard deviation of 2.3 percent. In contrast, the average unemployment rate of the 12 southeastern cities sampled is 10.9 percent with a standard deviation of 3.1 percent.
What does this information imply for the scholar’s thesis? Is there a difference between the two regions? Employ a two-tailed t-test using a 95% confidence level.
For this problem:
a. state your assumptions (assume that the variances are not equal) (2 points)
b. state your hypotheses (2 points)
c. compute the test statistic (use the formula in the slides) (2 points)
d. calculate the critical value (remember to compute the appropriate degrees of freedom) (2 points)
e. draw a conclusion. (2 points)
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