Problem 1

Problem 1 (6+2+3+7 = 18 points) A budget advisory board gives families with financial problems advice on spending on family income. For eight families, it was determined how much their expenditure (in euros) per month was before the advisory services took place and how much the monthly expenses were after advices were issued. An overview is given in next table: Table 1.1 Monthly Expenses (euros) Family 1 2 3 4 5 6 7 8 Before advice 2100 1600 3200 2600 1300 3000 2100 1600 After advice 2150 1400 2800 2500 1300 2700 2000 1700 a. Carry out a t-test to figure out if the expenses are significantly decreased. b. Which assumptions are needed to carry out the t-procedure? c. We can also carry out a sign test. State the hypotheses of this test and describe the variable you are using. d. Carry out the Wilcoxon Signed Rank Test to determine whether the families reduced their spending significantly after the advice