Conclusion to support case study question

Figure 1: Line graph for exports and importsAs can be seen from the chart, an upward trend can be witnessed in the line chart of exports and imports of goods and services... The mean of

 Course Code and Name:

ECON1193- Business Statistics

Maheshwari

Assignment 1

Case

Study

TABLES OF CONTENTS

1 INTRODUCTION: 3

2 CALCULATIONS AND GRAPHS TABLE: 4

3 Conclusion to support Case Study question: 8

4. Justify an answer: 8

5. Two other factor that can impact the growth of Luxembourg: 9

References: 10

1 Introduction:

In the past, Luxembourg’s economy was notable for its close ties with the rest of Europe, as the country was too small to sustain an internal market on its own Luxembourg’s prosperity was based on the iron and steel industry, which accounted for nearly 80% of total export value in the 1960s However, by the late 20 century, the country’s economy relied on international banking and financial services, as well as noncommercial activities such as hosting intra-Eupore political events (Britannica 2021) In 1990, the GDP of Luxembourg was $11,318 billion (Figure 5) Besides, the GNP of Luxembourg was recorded at $12,03 billion (Figure 6) in the year 1990 With the population at 381,780 in 1990 (PopulationPyramid 2021), the per capita income of Luxembourg was $29,639 (Figure 6) Currently, Luxembourg is a prosperous European country and belongs to all major and relevant economic alliances Moreover, the economic of Luxembourg is rely on banking, steel and industrial In 2017, the GDP of Luxembourg was $64,182 billion (Figure 7) and GNP for 2017 was $39,62 billion (Figure 8) With the population in 2017 was 591,913 (PopulationPyramid 2021), the per capita income was $66,430 (Figure 8) Additionally, there

is strong evidence of bidirectional causality between import and economic growth, as well as between exports and economic growth (Bakari & Mabrouki 2016) Many researcher claims that ‘the growth in export affects economic growth positively'' (Balassa 1978) while an increase in economic activity would result in an increase in imports, as high real income encourage consumption There is a direct link between economic growth and imports in this regard (Grossman & Helpman 1992) In short, the GDP, GNP, Per capita income, export, and import could be considered as a criterion to measure the economic growth of a country Especially in this case, based on the number of GDP, GNP, and Per capita income, it could be concluded that Luxembourg is witnessing economic growth

2 Calculations and graphs table:

a) Line graph for exports and imports:

Figure 1: Line graph for exports and imports

As can be seen from the chart, an upward trend can be witnessed in the line chart of exports and imports of goods and services Starting at 98,340 in 1986, exports of goods and services fluctuated slightly around 100 from 1987 to 1996, before reaching 211,559 in 2018 By contrast, imports of goods and services were 85,233 in 1986 Imports of goods and services reached 175,544 in 2018

b) Measure of Central Tendency

Measure of

Central

Mean 147,56 > 123,14

Observation value < -23,88 OR

Observation value > 306,95

Observation value < -9,1 OR Observation

value > 244,85

Table 1: Comparison of all measures of Central Tendency of the exports and imports of

goods and services (% of GDP) for Luxembourg

The mean is defined as an average and calculated by ‘adding all the values in the data set divided by the number of observations in it’ (Manikandan 2011) But a drawback of the mean

is that it is sensitive to outliers (Manikandan 2011) However, there are no outliers in the data set Therefore, the mean is the most appropriate way to calculate Central Tendency The mean

of exports of goods and services is 1,19 times higher than the mean of imports of goods and services

c) Measures of Variation:

Measure of Variation Exports Comparation (>,<,=) Imports

Table 2: Comparason of all Measures of Variation of exports and imports of goods and

services

The CV is the most appropriate tool for Measures of Variation in this case as the mean of exports and imports of goods and services is different (147,56 and 123,14) The coefficient of variation (CV) is a statistical measure of data points’ dispersion around the mean in a data series ( Hayes 2021) The CV of exports of goods and services is fairly higher in comparison

to the CV of imports of goods and services (29,33% and 28,93 respectively) These figures show that exports of goods and services are more variable than imports of goods and services

d) Histogram:

Figure 2: Histogram of exports of goods and services

Figure 3: Histogram of imports of goods and services

Exports of goods and services range from 95,602 to 221,196 with a bin width of 31,39, whereas imports of goods and services range from 85,233 to 175,544 with a bin width of 22,58 The histogram for both exports and imports of goods and services have four bins (ranges) According to Figure 2 and Figure 3, the most frequent value occupied in exports of goods and services is (95,602 to 127,001), which is slightly higher than the most frequent value in imports of goods and services (79,698 to 106,565) As a result, it is clear that exports

of goods and services (% of GDP) is higher compared with imports of goods and services

e) Box-and-whisker plot:

Figure 4: Box-and-Whisker plot of exports and imports of goods and services

Left-side Compare Right-side Result Box 47,258 > 35,448 Left-skewed

Left-side Compare Right-side Result Box 37,336 > 26,150 Left-skewed

According to the Box-and-Whisker plot, the median of exports is 147,439, which is higher than the median of imports at only 123,141, and the median of exports is quite close to the Q3

of imports

As can be witnessed from the chart, the IQR of exports is longer than the IQR of imports (82,707 and 63,486, respectively) The Box-and-Whisker plot is the most useful tool to visualize the differences between exports and imports of goods and services, especially, the data is more dispersed the longer the box is The data is less dispersed when it is smaller

(McLeod 2019) Finally, both exports and imports have a right-skewed distribution This Box-and-Whisker plot indicates that exports of goods and services are higher compared with imports of goods and services

3 Conclusion to support Case Study question:

According to the result in part 2, it is clear that Luxembourg is experiencing economic growth Firstly, as can be seen from the line graph, the line representing the number of exports of goods and services is located in a higher position compared with the line of imports of goods and services Secondly, the mean of exports of goods and services is 147,56, which is 1,19 times higher than that of imports, at only 123,14 It means that the Central Tendency of exports is higher than that of imports Thirdly, the CV of exports is higher than the CV of imports (29,33% and 28,93%) Based on these CVs of export and imports of goods and services, it can be concluded that the data of goods and services is more variable than imports of goods and services Finally, based on the Box-and-Whisker plot, the median of exports of goods and services is 147,439 is higher than the median of imports, at only 123,46 Besides, the median of export is quite close to the Q3 of import As a result, the box of exports of goods and services is located in a higher position compared with the box for imports Based on these results in part 2, it can be recorded that both exports of goods and services are increasing from 1986 to 2018 Especially, exports are higher than imports over the period shown Additionally, there is strong evidence of bidirectional causality between import and economic growth, as well as between exports and economic growth (Bakari & Mabrouki 2016) In conclusion, based on these mentioned data, it can be decided that Luxembourg is experiencing economic growth

4 Justify an answer:

In part 1, many research claim that ‘the growth in export affects economic growth positively'' (Balassa 1978) while an increase in economic activity would result in an increase in imports,

as high real income encourage consumption There is a direct link between economic growth and imports in this regard (Grossman & Helpman 1992) In short, the number of GDP, GNP, Per capita income, export and import could be considered as a criterion to measure the

economic growth of a country Additionally, in part 3, there is an increase in the figure for exports and imports of goods and services in Luxembourg from 1986 to 2018 From 1986 to

2018, the figure for exports is slightly higher than import Based on the research mentioned in part 1 and these threse three results in part 3, it can be concluded that Luxembourg is experiencing economic growth

5 Two other factor that can impact the growth of Luxembourg:

There are two other factors that can influence the growth of Luxembourg, that are: natural resources (economic factor) and human resource (non-economic factor) Firstly, natural resources refer to “all resources” that exist in their natural state, as well as “all systems” that are or can be useful to man in current technological, economic, and social conditions (Flavin, cited in Zaharia & Suteu 2010) In Luxembourg, the major natural resources are iron and steel (WorldAtlas 2021) Steel is the foundation of the Grand Duchy’s economy, accounting for about 80% of all forms of production value, with an annual output of 3,8 million tons, of which well over 90% is exported While the iron industry in one form or another has been an important industry since the sixteenth century (Edward 1961) Secondly, when it comes to human resource, it is the ultimate source of a country’s wealth Human beings are the active agents who ‘accumulate capital, exploit natural resources, build social, economic and political organization, and carry forward national development’ (Harbison 1973) When it comes to the proportion of the population with a tertiary education, Luxembourg ranks first

In 2018, 56,2 percent of the Luxembourg population aged 30-34 completed higher education Therefore, human resource is an advantage in terms of development in Luxembourg compared with other nations (The Government of the Grand Duchy of Luxembourg 2019)

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Appendices:

Figure 5: GDP of Luxembourg in 1990 Source:

< https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?

end=2020&locations=LU&start=1961&view=chart >

Figure 6: Luxembourg GNP and per capita income of Luxembourg in 1970 Source:

< https://www.macrotrends.net/countries/LUX/luxembourg/gnp-gross-national-product >

Figure 7: GDP of Luxembourg in 2017.

Source:< https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=LU >

Figure 8: GNP and Per capita income of Luxembourg in 2017.

Source:<

https://www.macrotrends.net/countries/LUX/luxembourg/gnp-gross-national-product >

Figure 7: GDP per capita of Luxembourg in 1990.

Source:< https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=LU >