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. 2000 2018 New businesses 1,240 1,325 Business failures 600 496 State income tax receipts ($ millions) 185.2 220.8 College student enrollment 242,299 291,291 State sales tax ($ millions) 55.1 57.4 The weights you assign are: new businesses 15%, business failures 10%, income tax
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
2000 2018
New businesses 1,240 1,325
Business failures 600 496
State income tax receipts ($ millions) 185.2 220.8
College student enrollment 242,299 291,291
State sales tax ($ millions) 55.1 57.4
The weights you assign are: new businesses 15%, business failures 10%, income tax 42%, enrollment 13% and sales tax 20%.
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.)
Economic activity has (increased or decreased) _____% between 2000 and 2018
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