b. Compute the leading economic indicator for 2018. (Round your answer to 2 decimal places.) Leading economic indicator c. Interpret the indexes. (Round your answer to 2 decimal places.)

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Question
54
You are employed by the state bureau of economic development. There is a demand for
a leading economic index to review past economic activity and to forecast future
economic trends in the state. You decide that several key factors should be included in
the index: number of new businesses started during the year, number of business
failures, state income tax receipts, college enrollment, and the state sales tax receipts.
Here are the data for 2000 and 2018.
New businesses
Business failures
State income tax receipts ($ millions)
College student enrollment
State sales tax ($ millions)
Click here for the Excel Data File
2000
1,0881
627
Leading economic indicator
191.7
242,119
Economic activity has
41.6
2018
1,162
520
162.6
290,841
The weights you assign are: new businesses 15%, business failures 10%, income tax
40%, enrollment 10% and sales tax 25%.
39.9
b. Compute the leading economic indicator for 2018. (Round your answer to 2 decimal
places.)
c. Interpret the indexes. (Round your answer to 2 decimal places.)
% between 2000 and the 2018.
Transcribed Image Text:54 You are employed by the state bureau of economic development. There is a demand for a leading economic index to review past economic activity and to forecast future economic trends in the state. You decide that several key factors should be included in the index: number of new businesses started during the year, number of business failures, state income tax receipts, college enrollment, and the state sales tax receipts. Here are the data for 2000 and 2018. New businesses Business failures State income tax receipts ($ millions) College student enrollment State sales tax ($ millions) Click here for the Excel Data File 2000 1,0881 627 Leading economic indicator 191.7 242,119 Economic activity has 41.6 2018 1,162 520 162.6 290,841 The weights you assign are: new businesses 15%, business failures 10%, income tax 40%, enrollment 10% and sales tax 25%. 39.9 b. Compute the leading economic indicator for 2018. (Round your answer to 2 decimal places.) c. Interpret the indexes. (Round your answer to 2 decimal places.) % between 2000 and the 2018.
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