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.)
Does this information indicate that foreign debt per capita is increasing in developing countries? Use a 0.05 level of significance.
(a) What is the level of significance?
State the null and alternate hypotheses.
H
0: Distributions are the same.
H
1: Modern debt distribution is lower.H
0: Modern debt distribution is higher.
H
1: Distributions are the same.H
0: Modern debt distribution is lower.
H
1: Distributions are different.H
0: Distributions are the same.
H
1: Modern debt distribution is higher.
(b) Compute the sample test statistic. (Round your answer to two decimal places.)
What is the sampling distribution?
Student'stchi-square normaluniform
(c) Find the
P-value of the sample test statistic. (Round your answer to four decimal places.)
(d) Conclude the test.
At the ? = 0.05 level, we reject the null hypothesis and conclude the data are statistically significant.At the ? = 0.05 level, we fail to reject the null hypothesis and conclude the data are not statistically significant. At the ? = 0.05 level, we reject the null hypothesis and conclude the data are not statistically significant.At the ? = 0.05 level, we fail to reject the null hypothesis and conclude the data are statistically significant.
(e) Interpret the conclusion in the context of the application.
Reject the null hypothesis, there is sufficient evidence that modern debt is higher per capita.Fail to reject the null hypothesis, there is sufficient evidence that modern debt is higher per capita. Reject the null hypothesis, there is insufficient evidence that modern debt is higher per capita.Fail to reject the null hypothesis, there is insufficient evidence that modern debt is higher per capita.