Problem:

In conjunction with the housing foreclosure crisis of 2009, many economists expressed increasing concern about the level of credit card debt and efforts of banks to raise interest rates on these cards. The banks claimed the increases were justified. A Senate sub-committee decided to determine if the average credit card balance depends on the type of credit card used. The cards under consideration are Visa, MasterCard, Discover, and American Express. The sample sizes to be used for each level are 25, 25, 26, and 24, respectively.

Required:

Question 1: Describe the parameter of interest for this analysis.

Question 2: Determine the factor associated with this experiment.

Question 3: Describe the levels of the factor associated with this analysis.

Question 4: State the number of degrees of freedom available for determining the between-samples variation.

Note: Please provide reasons to support your answer.