The Basic Practice of Statistics 7th Edition

Published by W. H. Freeman
ISBN 10: 1-46414-253-X
ISBN 13: 978-1-46414-253-6

Chapter 0 - Getting Started - Chapter 0 Exercises: 0.2

Answer

When there is an international issue that affects the United States, our prices increase. If there are no international issues, then our gas prices don't have as much variance. The wild swings happened after international events that affected the United States. The largest variances occurred during the period of unrest in the Middle East (2000s, 1980s) and during World War II (1940s).

Work Step by Step

Figure 0.2 shows a spike in the price near 2008, just as the unrest in the Middle East was happening (and there was high demand). Figure 0.3 shows a spike in the price in the 1970s, just as there was additional unrest in the Middle East. Additionally, there was a spike in gas prices in the 1930s, likely before the start of World War II.
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