An International Economist Believes That There Is a Significant Relationship

question 46

Multiple Choice

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

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Definitions:

Net Capital Outflow

The difference marked by domestic people's foreign asset purchases compared to foreign people's domestic asset acquisitions.

Software

Programs and other operating information used by a computer to perform specific tasks.

Real Exchange Rate

The pace at which one country's currency can be swapped for that of another, after accounting for inflation.

Nominal Exchange Rate

The rate at which one currency can be exchanged for another currency, not adjusted for inflationary differences between the two currency areas.