A Small Difference Between Means May Not Be Statistically Significant

question 18

Multiple Choice

A small difference between means may not be statistically significant with a small sample, but it could reach statistical significance with a large sample because:

• A) the overlap between distributions grows as sample size increases.
• B) as N increases, the standard error gets smaller, reflecting less variability in sample means, which allows greater sensitivity to detect small but significant differences.
• C) as N increases, distributions get more heterogeneous, allowing small differences to be detected.
• D) the difference between means gets larger as sample size increases.

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Definitions:

Aggregate Demand

The combined quantity of goods and services that is sought in the economy, set at a certain price level for a specific period.

Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period, depending on the price level.

Aggregate Demand

The overall consumption requirement for goods and services in an economic landscape, priced at a given level over a set duration.

Economic Fluctuations

Variations in the level of economic activity over time, characterized by periods of boom and recession.