Question 13.6

13.6 Annual inflation rate.

Here are the annual inflation rates for the United States for the years 2000 through 2013:

Year 2000 2001 2002 2003 2004 2005 2006
Percent (%) 3.4 2.8 1.6 2.3 2.7 3.4 3.2
Year 2007 2008 2009 2010 2011 2012 2013
Percent (%) 2.8 3.8 −0.4 1.6 3.2 2.1 1.5
  1. Determine the values of and and the number of runs around the sample mean.
  2. Assuming the underlying process is random, what is the expected number of runs?
  3. Determine the -value of the hypothesis test of randomness.