Suppose You Had the Following Information Regarding the Economy

question 16

Multiple Choice

Suppose you had the following information regarding the economy:

Which of the following best describes the behavior of the real wage rate?

• A) It increased from 2001 to 2002 and increased further from 2002 to 2003.
• B) It dropped from 2001 to 2002 and then increased from 2002 to 2003.
• C) It dropped from 2001 to 2002 and then remained the same from 2002 to 2003.
• D) It increased from 2001 to 2002 and then dropped from 2002 to 2003.
• E) It remained the same from 2001 to 2002 and then increased from 2002 to 2003.

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Definitions:

P-Value

The probability of observing a test statistic at least as extreme as the one observed, assuming the null hypothesis is true.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, a measure of the risk of making a Type I error.

Alternative Hypothesis

The hypothesis that there is a significant difference or effect, contrasting with the null hypothesis and indicating the presence of an observed effect.

Type II Error

A statistical mistake where a false null hypothesis is not rejected, meaning the test fails to observe a difference when in truth there is one.