orrowing 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 171 151 122 124 97 84 32 24 28 81 Historic Debt per Capita 146 135 84 111 5
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
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 | 171 | 151 | 122 | 124 | 97 | 84 | 32 | 24 | 28 | 81 |
| Historic Debt per Capita | 146 | 135 | 84 | 111 | 52 | 67 | 34 | 31 | 46 | 76 |
| Country | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 |
| Modern Debt per Capita | 26 | 24 | 18 | 25 | 191 | 183 | 146 | 129 | 102 | 79 |
| Historic Debt per Capita | 25 | 13 | 14 | 29 | 103 | 153 | 149 | 115 | 116 | 72 |
Does this information indicate that foreign debt per capita is increasing in developing countries? Use a 0.01 level of significance.
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