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 6 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.Show the rank correlation. $$\begin{array} { c c c } && \text { Unemployment } \ \text { Country } & \text { Debt }& \text { Rate } \ 1&1&5\ 2 & 3 & 5 \ 3 & 5 & 8 \ 4 & 1 & 4 \ 5 & 6 & 8 \ 6 & 6 & 12 \end{array}$$ 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

Spearman's rank correlation coefficient is a non-parametric measure of the monotonic relationship between two variables. It is calculated by first ranking the data points for each variable, and then computing the correlation between the ranks. In this case, the Spearman's rank correlation coefficient is 0.914, which indicates a strong positive relationship between debt and unemployment rate. Since the p-value is less than 0.05, we reject the null hypothesis and conclude that there is a significant relationship between debt and unemployment rate.

An International Economist Believes That There Is a Significant Relationship