A Possible Reason for the High Systematic Risk of Export

question 40

Multiple Choice

A possible reason for the high systematic risk of export revenue variance (VAREX) is the:

• A)tendency of world commodity prices to reflect non-similar economic conditions
• B)sensitivity of this ratio to rising nominal and real interest rates in the developed countries
• C)tendency of prices and world demands for commodities to reflect simultaneously economic conditions
• D)discretionary nature of money supply growth for LDC governments

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Definitions:

Controlled Error

Error that is managed or regulated within an experiment to ensure it does not affect the validity of the results.

Critical Value

A point on the scale of the test statistic beyond which we reject the null hypothesis; it defines the boundary for the region of rejection.

Power

The probability that a statistical test will correctly reject a false null hypothesis, effectively detecting an actual effect.

Type II Error

The mistake of failing to reject a false null hypothesis, also known as a "false negative" finding.