oints] DETAIL hear the following on your local radio station's business news: "The economy last year grew by 5%. This was the second year in a row in which the economy showed a 5% wth." This means that, in dollar terms, the economy grew more last year than the year before. Why? The economy last year was smaller than the year before; 5% of last year's economy is smaller than 5% of the year before. The economy last year was larger than the year before; 5% of last year's economy is larger than 5% of the year before. The economy last year was equal to the year before; 5% of last year's economy is the same as 5% of the year before.
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Interpreting the News You hear the following on your local radio station's business news: "The economy last year grew by $1 \%$. This was the second year in a row in which the economy showed a $1 \%$ growth." This means that, in dollar terms, the economy grew more last year than the year before. Why?
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In early 2009 , the economy was experiencing a recession. But how was the recession affecting the stock market? Shown are data from a sample of 15 companies. Shown for each company is the price per share of stock on January 1 and April 30 (The Wall Street Journal, May 1,2009 ). $$\begin{array}{lcr} \text { Company } & \text { January 1 (\$) } & \text { April 30 (\$) } \\ \text { Applied Materials } & 10.13 & 12.21 \\ \text { Bank of New York } & 28.33 & 25.48 \\ \text { Chevron } & 73.97 & 66.10 \\ \text { Cisco Systems } & 16.30 & 19.32 \\ \text { Coca-Cola } & 45.27 & 43.05 \\ \text { Comcast } & 16.88 & 15.46 \\ \text { Ford Motors } & 2.29 & 5.98 \\ \text { General Electric } & 16.20 & 12.65 \\ \text { Johnson \& Johnson } & 59.83 & 52.36 \\ \text { JP Morgan Chase } & 31.53 & 33.00 \\ \text { Microsoft } & 19.44 & 20.26 \\ \text { Oracle } & 17.73 & 19.34 \\ \text { Pfizer } & 17.71 & 13.36 \\ \text { Philip Morris } & 43.51 & 36.18 \\ \text { Procter \& Gamble } & 61.82 & 49.44 \end{array}$$ a. What is the change in the mean price per share of stock over the four-month period? b. Provide a $90 \%$ confident interval estimate of the change in the mean price per share of stock. Interpret the results. c. What was the percentage change in the mean price per share of stock over the fourmonth period? d. If this same percentage change were to occur for the next four months and again for the four months after that, what would be the mean price per share of stock at the end of the year $2009 ?$
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