In Hypothesis Testing If the Null Hypothesis Has Been Rejected

question 25

Multiple Choice

In hypothesis testing if the null hypothesis has been rejected when the alternative hypothesis has been true,

• A)a Type I error has been committed
• B)a Type II error has been committed
• C)either a Type I or Type II error has been committed
• D)the correct decision has been made

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Definitions:

Discretionary Policy

Economic policies based on ad hoc decisions by the government or monetary authorities to influence the economy, such as changes in spending or taxation.

Inflationary Expectations

The anticipation by consumers and businesses of future inflation, which can influence economic behavior such as spending, saving, and investment.

Potential GDP

The maximum output an economy can produce without triggering inflation, if all resources are fully employed.

Active Approach

A strategy in investment or management that involves ongoing, dynamic decision-making and actions in order to achieve specific objectives.