How To Create A Phillips Curve In Excel
1. Brandish Slide 2. Introduce the lesson past request the post-obit:
a. What are the prices of some goods and services you have purchased recently? [Answers will vary.]
b. What are you paid for piece of work you do? [Answers will vary.]
c. What do you know about prices your parents paid for goods and services when they were younger? [Answers will vary.]
d. What practise you know about what your parents were paid for piece of work they did when they were your historic period? [Answers volition vary.]
ii. Brandish Slide three. Innovate and define inflation – A sustained ascension in the full general toll level for all the goods and services produced in an economy.
three. Distribute Activity 1, and give students a moment to review the questions. Explain they will fill in the blanks as they lookout the video.
4. Show inflation video from Virtual Economic science at www.econedlink.org/interactives/index.php?iid=205
v. Review the answers to the shut activity using reply key for Activity 1.
6. Inquire students to consummate the quiz provided with the video. Review the answers.
7. Display Slide 4. Innovate and define unemployment every bit the number of people xvi years former and older who are without jobs and are actively seeking work.
eight. Brandish Slide v. To bank check for agreement, ask:
a. David is a 29-year-erstwhile male. He does not work. He plays video games viii hours a mean solar day and lives in the basement of his parent's home. He has not filled out a job application in six months. Is David counted as unemployed? [No, he is not actively searching for work.]
b. Martha is 34 and is a stay-at-home mom. She does not work for pay outside the habitation. Is Martha counted every bit unemployed? [No, she is non actively searching for work or working for pay.]
c. Jennifer is a nineteen-year-quondam female person and works role fourth dimension at the pizza parlor. Is Jennifer counted equally unemployed? [No, she is employed.]
d. Walter is a 45-twelvemonth-former male person and is not working. He has submitted his resume to ii firms this week. Is Walter counted equally unemployed? [Yes, he is not working and is actively searching for piece of work. ]
e. Ask the students to provide additional examples of those counted and non counted as unemployed. [Answers of those excluded – stay at domicile moms/dads not looking for work, those nether age xvi, and retirees. Answers for those included volition vary – working or actively searching for work, interviewing, applying for jobs, etc. ]
nine. Display Slide 6. Review the definitions of Positive and Negative (Inverse) Relationships – Explicate that if in that location is a positive relationship between variables, when one variable changes, the other moves in the same direction. Explain that if there is a negative (changed) relationship betwixt two variables, when i variable changes, the other variable moves in the opposite direction.
10. Brandish Slide 7. Utilize the Phillips curve pdf found at www.econedlink.org/lessons/docs_lessons/850_T12.pdf, to explain the relationship between unemployment and inflation in the 1960s.
11. Display Slide 8 and discuss the post-obit.
a. What do you notice about the graph in years 1964 through 1969? [For this short fourth dimension span, every bit inflation is increasing, unemployment is decreasing. There is a short-term negative human relationship between the two variables].
b. What kind of relationship is depicted past the Phillips curve for 1964 through 1969? [Negative human relationship.]
c. What is meant by a negative human relationship? [Equally ane variable increases, the other variable decreases. In the case of a Phillips curve, equally unemployment increases, inflation decreases, and vice versa, equally unemployment decreases, inflation increases.]
12. Explicate that some argued that the human relationship found in the Phillips curve was causal; that is, by allowing a little more inflation, policy makers could reduce unemployment. Tell students that today they will investigate data from several decades to determine whether in that location is a correlation between the two variables for those decades and to determine if the Phillips curve is causal.
xiii. Review prior cognition on Correlation (r) establish in a regression analysis. Explain that correlation (r) represents the relationship between two variables. The value of correlation (r) can just be betwixt 1 and -ane, strong correlations are closer to 1 or -1, while weak correlations are closer to 0.
14. Distribute a copy of Activity 2 to each student.
15. Display Slide 10. Using the unemployment and inflation (CPI) information provided for the 1980s in Action 2, instruct students to follow along as you work through how to create a scatterplot in Excel and summate the regression line equation and correlation coefficient for the human relationship between the two variables.
a. Open up Excel (Instructions listed are for Excel 2010.)
b. Enter information into excel equally shown below:
Date | Unemployment Charge per unit | Aggrandizement Rate |
1980 | 7.2 | 13.five |
1981 | vii.half-dozen | ten.four |
1982 | ix.7 | 6.ii |
1983 | nine.6 | 3.2 |
1984 | seven.v | 4.4 |
1985 | 7.ii | 3.v |
1986 | seven.0 | i.9 |
1987 | 6.ii | 3.6 |
1988 | 5.5 | 4.one |
1989 | 5.iii | 4.8 |
c. Display Slide 11. To produce a scatter plot select the area containing unemployment and aggrandizement.
d. Click on insert.
e. Cull scatter, hover to show then select option for Besprinkle with simply Markers.
f. Click on chart.
one thousand. Nether nautical chart tools, go to layout, select Chart Title, then select In a higher place Chart and alter characterization from "Unemployment" to "1980s."
h. Then click on Centrality Title, select Primary Horizontal Axis Title, then Title Below Axis rename title to "Inflation."
i. Then click on Centrality Title, select Primary Vertical Axis Title, then Rotated Title and rename championship to "Unemployment."
j. To detect the regression line and its equation, click on nautical chart, go to layout, choose Trend lines, scroll downwardly to more trend line options, choose linear, automated, and display equation on chart, hitting shut.
k. Select and move equation to side.
l. To find the correlation (r), click on Data, and then Data Analysis, scroll down and select Regression. Hitting OK.
g. Click into the input Y range box, then get back to spreadsheet and select the Change in CPI (Aggrandizement) data column of information.
n. Click into the input X range box, then go back to the spreadsheet and select the Unemployment data column of information.
o. Hit OK and review summary data, multiple R is your correlation coefficient (r)
p. Brandish Slide 12. Point out to students that their graph should look similar the one on Slide 12. See below.
Multiple R | 0.08 | |
R Foursquare | 0.01 | |
Adjusted R Square | -0.12 | |
Standard Error | 1.57 | |
Observations | ten |
16. Upon completion ask the students:
a. What blazon of human relationship exists in this decade? [Positive relationship.]
b. Is this a potent, medium or weak correlation? [Weak correlation because (r) value is .08]
17. Brandish Slide xiii and distribute a re-create of Action iii to each student. Instruct students to create a scatter plot using these information. Allow time for them to create scatter plot, regression line equation, and correlation coefficient (r) as washed with the 1980s data every bit a class group.
18. Display Slide 14. Point out that their completed graph should resemble the graph on Slide 14. Run across below:
1990s Data Analysis
SUMMARY OUTPUT
Regression Statistics
Multiple R | 0.43 | |
R Foursquare | 0.19 | |
Adjusted R Square | 0.08 | |
Standard Fault | 1.04 | |
Observations | 10 |
19. Upon completion ask the students:
a. What type of relationship exists for the decade? [Positiverelationship.]
b. Is this a potent, medium or weak correlation? [Medium because (r) value is .43]
20. Display Slide 15. Compare information and results of both graphs.
a. For which decade, 80s or 90s, exercise the information show the stronger correlation between inflation and unemployment? How practise yous know? [1990s had the stronger correlation considering the r value in the 80s was .08 and the r value for the 90s was .43 and .43 is closer to 1. When r = 1, ane is the highest numerical value for r and information technology represents the strongest positive correlation between two variables.]
b. How do the graphs differ? [In the 1980s the data points are more spread out, while in the 1990s the data points really line upwards very nicely.]
c. In the 1980s graph, pick an outlier and explain how it affects the correlation coefficient. [The information from 1981, it fabricated the correlation weaker because it is far from the regression line.]
21. Display Slide xvi and provide each grouping/pair of students a copy of Activeness 4. Allow fourth dimension for them to create besprinkle plot, regression line equation, and correlation coefficient (r) for the 2000s data, merely as done with the 1980s and 1990s data.
22. Display Slide 17. Point out that their graph should resemble the graph on the slide.
Multiple R | -0.86 | |
R Square | 0.74 | |
Adjusted R Square | 0.71 | |
Standard Error | 0.79 | |
Observations | 10 |
23. Upon completion ask the students:
a. What blazon of human relationship exists for the decade? [Negative relationship.]
b. Is this a strong, medium or weak correlation? [Strong correlation (r) value is -.86)]
c. Is this different from what we observed in the 80s and 90s data? [Yeah, because in the other decades we observe a positive relationship.]
Source: https://www.econedlink.org/resources/inflation-and-unemployment-is-there-a-correlation/
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