A report shows that Covid-19 reduced household expenditure in Europe by 8% in 2020.

Elsewhere, consumer spending also dropped significantly in 2020, with 4% seen in the United

States, and 17% reported in China (Broom, 2021).

After reading the report, Mr. Goh, a student of Singapore University of Social Sciences, was

interested to find out how Covid-19 has affected the household spending in Singapore.

Surprisingly, he found news saying that consumer spending among Singapore residents was resilient and at a similar level to 2019 (Choo, 2021).

In order to have a better understanding of the impact of Covid-19 on household spending of

Singapore residents, Mr. Goh decided to conduct a survey. He got a random sample of 32 students from Singapore University of Social Sciences, and collected data on their average monthly household expenditure in 2019 and 2020. Based on his own experience, he

hypothesized that the household expenditure of Singapore residents in 2020 is lower than that

in 2019.

Apply an appropriate hypothesis test to determine if the household expenditure of Singapore residents in 2020 is lower than that in 2019, at the significance level of 1%. Examine the assumptions required to perform the test. Are these assumptions reasonable? Please provide explanations.