Question

Your mayor just announced that the local unemployment rate dropped last month from the prior month. It went from 10.5% to 10.4%. Evaluate the scenario. Is there sufficient information to determine significance? Support your response with specific examples.

Answer 1

For the given scenario, there is no sufficient information provided for determination of the significance of the Mayor’s claim. For this scenario, Mayor only provided the estimates for the proportion of unemployment rate for the last two months. For checking the significance of these proportions, we need to conduct a hypothesis test for population proportion by using sample data. But, we do not provide any sample or population data for checking the significance. We can find the significance of the statement by mayor by using sample data. For example, we select the sample of 500 people and find that 51 persons are unemployed. This means 51/500 = 0.102 or 10.2% persons are unemployed.