An international economist believes that there is a significant relationship between the amount of debt and the rate of unemployment. He randomly selected six countries to determine if there is a significant relationship between debt and unemployment rate. In the following table, debt figures for the six countries are given in billions of dollars and the corresponding unemployment rate is given in percentages. He also discovered that both the distribution of debt and the distribution of unemployment rate were highly skewed. Use Spearman's rank correlation and determine if there is a significant correlation between debt and unemployment rate at alpha .05. Show the rank correlation. A) r_s = .914, reject the null hypothesis. B) r_s = .886, do not reject the null hypothesis. C) r_s = .886, reject the null hypothesis. D) r_s = .914, do not reject the null hypothesis.

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Quizplus · Accepted Answer

Reject H₀. There appears to be a significant positive relationship between the amount of debt and the unemployment rate. r_{.025, 6} = .886 11ead627_0a04_b310_93a1_b502b89a58ca_TB7056_00 = 3= 1 −= 1 −= 1 − .0857 = .9143 .9143 > .886; therefore, we reject H₀. There appears to be a significant positive relationship between the amount of debt and the unemployment rate.

An International Economist Believes That There Is a Significant Relationship