Economists suggest that students not accrue more than $2000 in credit card debt

Question

Economists suggest that students not accrue more than $2000 in credit card debt before graduating from college. In 2004, the Nellie Mae organization surveyed a random sample of 1074 U.S. colleg students about their credit situation and used the data to test the hypotheses: Ho: = 2000 Ha: > 2000, where is the mean credit card debt for all US college students in 2004 The students in the survey had an average credit card debt of $2169. The p-value for the test was 0.0026 a) write a conclusion for the test using alpha = 0.05 This answer has not been graded yet. b) The p-value, 0.0026, is a probability. Explain what probability it represents.

Explanation / Answer

a) Since P value is less than significance level 0.05, it means there is sufficient evidence that Student accure more than $2000 in credit card debt before graduating from degree.

b) It means Probabilitty that average credit card debt is more than $2169 is 0.0026

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