The Institute of Education Sciences Measures the High School Dropout

question 13

Multiple Choice

The Institute of Education Sciences measures the high school dropout rate as the percentage of 16- through 24-year-olds who are not enrolled in school and have not earned a high school credential. Last year, the high school dropout rate was 8.1%. A polling company recently took a survey of 1,000 people between the ages of 16 and 24 and found that 6.5% of them are high school dropouts. The polling company would like to determine whether the dropout rate has decreased. At a 5% significance level, the decision is to ________.

• A) reject H₀; we can conclude that the high school dropout rate has decreased
• B) reject H₀; we cannot conclude that the high school dropout rate has decreased
• C) do not reject H₀; we can conclude that the high school dropout rate has decreased
• D) do not reject H₀; we cannot conclude that the high school dropout rate has decreased

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its short-term assets.

Short-Term Debt

Financial obligations due within one year, often used to finance day-to-day operations or immediate expenses.

Horizontal Analysis

Horizontal analysis is a financial analysis technique that compares line items in financial statements over a series of periods to identify trends and growth patterns.

Base Year

A reference point in time used for comparison purposes when analyzing economic or financial data.