Robin IncFeared That the Average Company Loss Is Running Beyond $34,000

question 12

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:

Laissez-Faire Policy

An economic philosophy of free-market capitalism that opposes government intervention.

Tax Rates

The percentage at which an individual or corporation is taxed, which can vary by income or profit level, type of tax, and jurisdiction.

Zero Tax Revenue

A theoretical or policy situation where the government sets tax rates at levels that result in no revenue being collected, often discussed in contexts of extreme tax models.

Velocity of Money

Velocity of money is the rate at which money circulates in the economy, typically measured as the ratio of nominal GDP to the money supply.