When Testing for a Difference Between the Means of a Treatment

question 9

Essay

When testing for a difference between the means of a treatment group and a placebo group, the
computer display below is obtained. Using a 0.05 significance level, is there sufficient evidence
to support the claim that the treatment group (variable 1)comes from a population with a mean
that is less than the mean for the placebo population? Explain. $\text { t-Test: Two Sample for Means }$
$\begin{array}{|l|l|l|l|}\hline 1 & & {\text { Variable 1 }} & \text { Variable 2 } \\\hline 2 & \text { Mean } & 65.10738 & 66.18251 \\\hline 3 & \text { Known Variance } & 8.102938 & 10.27387 \\\hline 4 & \text { Observations } & 50 & 50 \\\hline 5 & \text { Hypothesized Mean Difference } & 0 & \\\hline 6 & t & -1.773417 & \\\hline 7 & P(T<=t) \text { one-tail } & 0.0384 & \\\hline 8 & T \text { Critical one-tail } & 1.644853 & \\\hline 9 & P(T<=t) \text { two tail } & 0.0768 & \\\hline 10 & t \text { Critical two-tail } & 1.959961 & \\\hline\end{array}$

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Definitions:

Speculative Motive

The intention to hold cash or assets in anticipation of making profits from expected changes in their prices or exchange rates in the future.

Inflation

The pace at which the overall cost of goods and services increases, causing the value of money to decrease.

Money Supply

The total volume of economic monetary assets, such as cash, coins, and the balances in checking and savings accounts, at a specific period.

Currency

The system of money in general use in a specific country, consisting of banknotes and coins, that is accepted as a medium of exchange.