Question

# In one of your classes, the professor told you that average GDP among industrialized countries is...

In one of your classes, the professor told you that average GDP among industrialized

countries is \$14,200 (14.2 in \$1000s). You believe the information your professor has

is incorrect and outdated, so you decide to collect your own data. The results of a

sample reveal that the average GDP per capita (in \$1000s) among 123 industrialized

countries is calculated to be 13.6 with a standard error of .45.

(a) If you hypothesize that your professor is incorrect and that average GDP per

capita among industrialized countries is

not

\$14,200, write out the appropriate

null and alternative hypotheses.

(b) Calculate a 90% confidence interval. Based on the results, would you reject or

accept the null hypothesis?

(c) Based on the values above, the test statistic is -.51. Using a two-tailed test of

significance and an

α

of .05, can you reject the null hypothesis? Also, calculate

the corresponding p-value and interpret.

#### Homework Answers

Answer #1

(a) Hypothesis : Vs

(b) The 90% confidence interval is ,

i.e. (\$12718 , \$14782)

Here , the value lies in the 90% confidence interval

Therefore , accept the null hypothesis.

(c) P-value =

Decision : Here , P-value > 0.05

Therefore , accept the null hypothesis

Interpretation : Hence , there is not sufficient evidence to conclude that the average GDP per capita among industrialized countries is not equals to \$14,200.

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