Students Who Graduated from College in 2010 with Student Loans

question 66

Essay

Students who graduated from college in 2010 with student loans owed an average of $25,250 (TheNew York Times,November 2,2011).An economist wants to determine if the average debt has increased since 2010.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 2001.
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:

Similarity

The state of being alike or sharing common features, traits, or characteristics.

Complementarity

in social psychology refers to relationships in which partners possess or display traits that complement or enhance those of the other.

Boredom

A state of feeling disinterested and restless due to a lack of stimulation, engagement, or excitement.

Unprotected Sex

Sexual intercourse without the use of barrier methods of contraception, which increases the risk of sexually transmitted infections and unwanted pregnancies.