A 005 Significance Level Is Being Used to Test a Correlation

question 46

Multiple Choice

A 0.05 significance level is being used to test a correlation between two variables. If th? linear correlation coefficient r is found to be 0.591 and the critical values are $r = \pm 0.878$ what can you conclude?

• A) There is not sufficient evidence to support the claim of a linear correlation between the two variables.
• B) There is sufficient evidence to support the claim of a linear correlation between the two variables.

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Definitions:

Economic Profit

The profit a company makes after deducting both its explicit (direct) and implicit (indirect) costs.

Allocation Of Resources

The process by which resources are distributed for the production of goods and services, usually determined by market forces in a free market, or by government decisions in a planned economy.

Resource Use

The consumption or exploitation of natural resources by humans for manufacturing, energy production, and other economic activities.

Real Rate

The interest rate that has been adjusted to remove the effects of inflation, reflecting the true cost of borrowing.