Borrowing money may be necessary for business expansion. However, too much borrowed money can also mean trouble. Are developing countries tending to borrow more? A random sample of 20 developing countries gave the following information regarding foreign debt per capita (in U.S. dollars, inflation adjusted). (Reference: Handbook of International Economic Statistics, U.S. Government Documents.)
Borrowing money may be necessary for business expansion. However, too much borrowed money can also mean trouble. Are developing countries tending to borrow more? A random sample of 20 developing countries gave the following information regarding foreign debt per capita (in U.S. dollars, inflation adjusted). (Reference: Handbook of International Economic Statistics, U.S. Government Documents.)
Chapter9: Sequences, Probability And Counting Theory
Section9.7: Probability
Problem 1SE: What term is used to express the likelihood of an event occurring? Are there restrictions on its...
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Borrowing money may be necessary for business expansion. However, too much borrowed money can also mean trouble. Are developing countries tending to borrow more? A random sample of 20 developing countries gave the following information regarding foreign debt per capita (in U.S. dollars, inflation adjusted). (Reference: Handbook of International Economic Statistics, U.S. Government Documents.)
| Country | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| Modern Debt per Capita | 175 | 152 | 125 | 124 | 95 | 83 | 34 | 29 | 21 | 89 |
| Historic Debt per Capita | 147 | 134 | 86 | 113 | 58 | 62 | 33 | 36 | 49 | 72 |
| Country | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 |
| Modern Debt per Capita | 23 | 28 | 18 | 29 | 197 | 189 | 144 | 124 | 102 | 71 |
| Historic Debt per Capita | 24 | 12 | 12 | 29 | 106 | 156 | 145 | 119 | 118 | 76 |
Does this information indicate that foreign debt per capita is increasing in developing countries? Use a 0.01 level of significance.
(a) What is the level of significance?
Compute the sample test statistic.
Find the P-value of the sample test statistic.
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