Final answer:
The student's inquiry pertains to forming hypotheses for a study on whether the average credit card balance for undergraduate students has increased from $3,173, using a known population standard deviation of $1,000. The null hypothesis posits no increase, while the alternative hypothesis suggests an increase.
Step-by-step explanation:
The student's question revolves around setting up a statistical test to determine if there has been a continued increase in the average credit card balance for undergraduate students since the report showing a mean balance of $3,173. Considering the previous research and studies on credit card usage and debt in the United States, the null and alternative hypotheses can be established. Using the population standard deviation (σ) of $1,000, the following hypotheses are set:
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- Null Hypothesis (H0): The mean credit card balance for undergraduate students has not increased, or has remained equal to $3,173.
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- Alternative Hypothesis (H1): The mean credit card balance for undergraduate students has increased from $3,173.
These hypotheses will be assessed using appropriate statistical testing methods, such as the z-test, considering the given population standard deviation. A study with these hypotheses aims to gain insights into the current financial behaviors of undergraduate students, especially concerning credit card usage.
It's important to also account for broader financial trends, including the statistics that show the high levels of consumer debt and the amount of interest and fees paid by American families due to credit card usage. It reflects the financial landscape that college students are entering after graduation, potentially surrounded by substantial debts.