Poverty in a Study of How the Burden of Poverty

question 90

Essay

Poverty In a study of how the burden of poverty varies among U. S. regions, a random
sample of 1000 individuals from each region of the United States recently yielded the
information on poverty (based on defining the poverty level as an income below $10,400
for a family of 4 people). The data and calculation of the test statistic is shown in the table
below. (All the conditions are satisfied - don'ft worry about checking them.)
a. Write appropriate hypotheses.
b. Suppose the expected values had not been given. Show exactly how to calculate the
expected count in the first cell.
c. How many degrees of freedom are there?
d. State your complete conclusion in context.

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Definitions:

Principal Balance

The outstanding amount of a loan or mortgage that remains to be paid, not including interest.

Personal Loan

A type of unsecured loan provided by financial institutions based on the borrower’s creditworthiness without collateral.

Perpetuity

A type of annuity that continues indefinitely, often used in finance to model consistent payments or cash flows without an end date.

Compounding Period

The frequency with which interest is added to the principal balance of an investment, which can be annually, semiannually, quarterly, etc.