The Power of a Test Is the Probability of Making

question 74

Short Answer

The power of a test is the probability of making: A. a correct decision when the null hypothesis is false.
B. a correct decision when the null hypothesis is true.
C. an incorrect decision when the null hypothesis is false.
D. an incorrect decision when the null hypothesis is true.

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Definitions:

Price Level

The average of current prices across the entire spectrum of goods and services produced in an economy.

Short Run

A period in economics where at least one factor of production is fixed, limiting the ability to increase output.

Aggregate Demand

Aggregate demand is the total demand for all goods and services within an economy at a given overall price level and within a given time period.

Aggregate Supply

The sum total of products and services that corporate entities in an economic environment plan to market over a fixed period.