I\'m stuck. thanks. Non-college grads (X-0) College grads (X= 1) Total Unemploye

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Non-college grads (X-0) College grads (X= 1) Total Unemployed (Y-0) 0.0753 0.0189 0.0942 Employed (Y-1) 0.5894 0.3164 0.906 Total 0.6647 0.3353 1.0002 The expected value of Y, denoted E(Y), is .906. (Round your response to three decimal places.) The unemployment rate is the fraction of the labor force that is unemployed. Show that the unemployment rate is given by 1- E(Y) Unemployment rate = 1-Pr(Y = 1) = 1-E(Y) = 1-0.906-0.0942 E(Y I x-1) is || |. (Round your response to three decimal places.)

Explanation / Answer

Ans.

E(Y) = 0*0.0942 + 1*0.906 = 0.906

So, E(Y I X=1) = P( Y=1, X=1) / P (X = 1) = 0.3164 / 0.3353 = 0.943

E( Y I X =0) = P (Y = 1 , X = 0) / P ( X = 0) = 0.5894 / 0.6647 = 0.886

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