Students Who Graduated from College in Last Year with Student

question 52

Essay

Students who graduated from college in last year with student loans owed an average of $25,250 (The New York Times, November 2). An economist wants to determine if the average debt has increased since last year. She takes a sample of 40 recent graduates and finds that their average debt was $28,275. Assume that the population standard deviation is $7,250.
A) Specify the competing hypotheses to determine whether the average undergraduate debt has increased since last year.
B) Calculate the value of the test statistic and the p-value.
C) At the 5% significance level, can you conclude that the average undergraduate debt has increased? Explain.

• A) Specify the competing hypotheses to determine whether the average undergraduate debt has increased since last year.
• B) Calculate the value of the test statistic and the p-value.
• C) At the 5% significance level, can you conclude that the average undergraduate debt has increased? Explain.

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Definitions:

Fertility-Rate Calculations

The computation of the average number of children that would be born to a woman over her lifetime in a specific population.

Replacement Rate

In economics, the ratio of a person's retirement income to their pre-retirement income, often focused on social security benefits.

Populations

Groups of individuals of the same species living and interacting within a specific area.

Total Demand

The entire quantity of a good or service that all consumers in a market are willing and able to purchase at a given price over a specific time period.