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Business Productivity Growth HypothesisIn this assignment we will attempt to study the effects that difference in Income Ratio henceforth known as IR between the years 1980 and 1990 have on the Productivity Growth PG during the same period of timeThe Income Ratio of one specific year can be found if we take the average income of the richest faction of a country the richest 20 of the population and divide it by that of the poorest faction the poorest 20 In this assignment the Income Ratios that were used were those of 13 different countries The IRs on both 1980 and 1990 were taken for all these countries and to find the difference between them the IR for 1990 was divided by the IR for 1980 for each country These new numbers illustrate the change of IR between the two years so that we can compare how the PG changes in relation to the changes in the IROn this assignment we use inductive reasoning to examine the data and find a theory a hypothesis that would combine the data given in a way that would make sense based solely on our data How do we know if the theory that we formulate makes sense In this case we will plot the points derived from the column IR 19901980 going on the x-axis and the column Productivity Growth 79-90 on the y-axis According to how the points are on the graph in relation to the Average Point 094145 point that is an average of all values and which divides the graph into four Quadrants if 80 of these points are where they would be expected to be to conform to the hypothesis then there is no reason to reject this hypothesis If on the other hand the majority of the points does not conform to our hypothesis are not where they were predicted to be then it is rejectedAnother method of reasoning frequently used by Mainstream
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