Students Who Graduated from College in 2010 with Student Loans

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.