Robin Inc Feared That the Average Company Loss Is Running Beyond

question 30

Multiple Choice

Robin Inc. feared that the average company loss is running beyond $34,000. It initially conducted a hypothesis test on a sample extracted from its database. The hypothesis was formulated as H0: average company loss $34,000 vs. H1: average company loss > $34,000. The test resulted in favor of Robin Inc.'s loss not exceeding $34,000. Detailed study of company accounts later revealed that the average company loss had run up to $37,896. Which of the following errors were made during the hypothesis test?

• A) Type III error
• B) Type II error
• C) Type I error
• D) Type IV error

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Definitions:

Regulatory

Pertaining to rules or directives made and maintained by an authority to regulate activities within specific fields.

Revenue Raising

Revenue raising refers to the process or strategies employed by governments or organizations to generate financial income, often through taxes, fees, or sales.

Public Policy

Principles and standards considered by government to benefit the community and used to guide legislative and administrative actions.

Department of Labor

A government agency responsible for occupational safety, wage standards, unemployment insurance benefits, re-employment services, and some economic statistics.