Twenty Economists Were Sampled and Asked to Predict If the National

question 83

Multiple Choice

Twenty economists were sampled and asked to predict if the national economy would improve during the next 12 months. Eleven of the economists predicted an increase, two economists predicted no change, and seven economists predicted a decrease in the economy. Conduct a hypothesis test at the 0.10 significance level to determine if the majority of economists predict an increase. The test statistic is _______.

• A) 0.224
• B) 1.179
• C) 1.707
• D) 0.179

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Definitions:

Two-Tailed Test

A statistical hypothesis test in which the area of interest or rejection region is in both tails of the probability distribution.

One-Tailed Test

A statistical hypothesis test in which the region of rejection is on only one side of the sampling distribution, testing for a direction-specific hypothesis.

Directional Hypothesis

A hypothesis that specifies the direction of the expected difference or relationship between two variables.

Critical Value

A threshold in hypothesis testing that determines the boundary for rejecting or failing to reject the null hypothesis.