Given That the Rank Correlation Coefficient, Rs, for 20 Pairs

question 57

Essay

Given that the rank correlation coefficient, rs, for 20 pairs of data is 0.809, test the claim of no correlation between the two variables. Use a significance level of 0.05.

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Definitions:

Normal Profit

The payment made by a firm to obtain and retain entrepreneurial ability; the minimum income that entrepreneurial ability must receive to induce entrepreneurs to provide their entrepreneurial ability to a firm; the level of accounting profit at which a firm generates an economic profit of zero after paying for entrepreneurial ability.

Entrepreneurial Talent

The unique skills and abilities possessed by individuals that enable them to innovate, start new businesses, and drive economic growth.

Business Cycle

Recurring increases and decreases in the level of economic activity over periods of years; consists of peak, recession, trough, and expansion phases.

Corporate Profits

The surplus income of corporations after paying all expenses, including operational expenses, salaries, and taxes.