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Federal Reserve Bank of Boston Economic Quiz
Poll Season
1. In 1928 and 1932, the magazine Literary Digest polled its mailing list to predict the presidential elections, and was within 4 and 2 percentage points of the actual vote share. In 1936, it added names from auto registrations, voter registrations, and telephone directories to create a mailing of 10 million ballots, from which they received 2.3 million responses. It predicted that Alf Landon (R) would defeat Franklin Roosevelt (D) with a 54% vote share. FDR won that election with over 60% of the vote. What most likely went wrong?
The sample was biased towards individuals with higher incomes.
The sample was dependent upon voluntary responses.
The sample was just not large enough.
Both A and B
2. In the various polls you see in the media, a margin of error is often reported along with the results. What is that margin of error accounting for?
The poll’s questions may have been badly worded and confusing.
People who were supposed to be in the sample didn’t participate.
The sample was biased in some way and not representative of the actual population
By simple chance, the majority opinion of this sample is different from that of the overall population.
3. What approximate sample size is a 3% sampling error (commonly seen in opinion polls) generally associated with?
100
1,000
10,000
100,000
4. Another method of predicting elections is to use a model of voter behavior. Professor Ray Fair of Yale University has developed a model which predicts the vote share in a presidential election, given party status, incumbency status, and three economic variables: inflation, output growth, and number of “good news” quarters (quarters in which the growth in GDP per capita was greater than 3.2%). The model has been quite accurate in the past, and this year’s prediction is a Bush victory by a sizable margin (58.7 share, with a standard error of 2.4). Does this mean a Bush victory is more or less a sure thing?
Yes, the model’s previous success indicates its accuracy.
No, voters may weigh factors other than economic growth, inflation, and “good news” quarters more heavily now than in the past.
No, the prediction itself has a large standard error.
Yes, since the economy would need to perform unrealistically poorly to change the outcome.
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Economic quiz written by: Nelson Gerew - April 2004
Views expressed in the economic quiz are those of the individual author.