Major Research Question
Will necessary expenditure on food change due to inflation caused by the current economic recession?
Hypotheses
Ho: Necessary expenditure on food will not significantly change due to inflation caused by the current economic recession.
Ha: Necessary expenditure on food will significantly change due to inflation caused by the current economic recession.
Prediction
We believe that income spent on food necessities will not significantly change due to the economic recession.
Food necessities, which we have defined to be groceries, are less subject to price fluctuations, so we expect expenditure on groceries to remain fairly constant (Frank et al. 2005). Any significant changes in expenditure on food necessities suggest inflation, which is characteristic of an economic recession (Frank et al. 2005). Inflation results in a decrease in purchasing power, meaning a larger sum of money is required to buy the same basket of goods (Frank et al. 2005). We recognize that expenditure may increase slightly due to yearly inflation; however, expenditure will not increase significantly as would be characteristic of inflation due to an economic recession. As a result, we will be operating under the assumption that any changes in food expenditure between the two years is due to yearly inflation, which is a strong indicator of effects due to the economic recession.
