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.)Country12345678910Modern Debt per Capita175152125124958334292189Historic Debt per Capita14713486113586233364972Country11121314151617181920Modern Debt per Capita2328182919718914412410271Historic Debt per Capita2412122910615614511911876Does 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.

Given, n=20α=0.01 The hypothesis to be tested here is- H0:μD=0H1:μD>0 The table below shows the…

Answered: Borrowing money may be necessary for…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

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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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