Tennessee Finance Assingment Help With Solution

The budget proposal submitted by the Bush administration in 2006 projected increasing deficits over time, that is, a growing 84P between expenditures and revenues. A contentious debate ensued. On one side, critics of the administration argued that larger deficits would lead to higher interest rates, while some supporters of the administration argued that it would have no impact on interest rates. The following table gives some historical data on deficits and interest rates. For each year, the deficit is the difference between revenues and expenditures measured in current dollars; a negative figure is a deficit. and a positive figure is a surplus.

On the basis of these data, what inference could you make about the relationship between fed-eral deficits and interest rates? Explain why inferences based on these data alone might he problematic.

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A four-year study in Tennessee randomly assigned children in kindergarten through third grade into classes of different sizes. The results of this experiment indicated that the smaller class sizes improved test scores [Krueger, 1999]. However, about 10 percent of the students in the study switched classes during the course of the experiment. Explain how such switching might lead to biased estimates of the impact of lower-ing clan size. Under what conditions would snitching be compatible with unbiased results? Give some examples of reasons for switching that would lead to biased results and some that would not

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