Question

the federal reserve system publishes weekly figures of m2 money supply. m2 includes things such as cash in circulation, deposits in checking accounts, nonbank traveler’s checks, accounts such as savings deposits, and money - market mutual funds. the accompanying bar chart provides data on the m2 money supply over a 13 - week period of 2017. complete parts (a) through (c) below.
click the icon to view the bar chart for the money supply.

a. what is wrong with the bar chart? choose the correct answer below.
○ a. the bar chart is improperly truncated because the vertical axis, which should start at 0, starts at 13.6 instead.
○ b. the bars are not touching one another, so it is difficult to compare them to each other.
○ c. the bar chart is improperly truncated because the vertical axis, which should start at 13, starts at 13.6 instead.
○ d. the bar chart is truncated and gives the impression that the data appear to have less variation.

b. construct a version of the bar chart with a nontruncated and unmodified vertical axis. choose the correct graph below.
○ click here to view bar chart d.
○ click here to view bar chart c.
○ click here to view bar chart b.
○ click here to view bar chart a.

c. construct a version of the bar chart in which the vertical axis is modified in an acceptable manner. choose the correct graph below.
○ click here to view bar chart a.
○ click here to view bar chart b.
○ click here to view bar chart c.
○ click here to view bar chart d.

Explanation:

Part (a)

To determine what's wrong with the bar chart, we analyze each option:

• Option A: Vertical axis for bar charts (especially for data like money supply) should start at 0 to show accurate proportions. If it starts at 13.6 instead of 0, it's improperly truncated, distorting the data's visual representation.
• Option B: Bar charts have spaces between bars (unlike histograms), so this is not an error.
• Option C: Vertical axis for such data should start at 0, not 13, so this reasoning is incorrect.
• Option D: Truncating the axis (starting above 0) usually exaggerates variation, not reduce it.

So the correct answer is A.

A non - truncated and unmodified vertical axis for the M2 money supply bar chart should start at 0. We need to identify the bar chart that has a vertical axis starting at 0. Among the given options, we assume that the correct bar chart (let's say bar chart a for example, but in a real - world scenario with the actual charts) has a vertical axis starting at 0. So we choose the option corresponding to the bar chart with a non - truncated (starts at 0) vertical axis.

When modifying the vertical axis in an acceptable manner, we can use a truncated axis but with a clear indication (like a break in the axis) to show that the axis is not starting at 0 for the sake of clarity when the data range is large but the variation is small. We need to identify the bar chart that has such an acceptable modification. Among the given options, we assume that the correct bar chart (let's say bar chart b for example, but in a real - world scenario with the actual charts) has an acceptable modification of the vertical axis.

Answer:

A. The bar chart is improperly truncated because the vertical axis, which should start at 0, starts at 13.6 instead.

Part (b)