The Financial Slump That Began in the Summer of 2007

question 54

Multiple Choice

The financial slump that began in the summer of 2007 was a result of:

• A) falling energy prices.
• B) massive tax increases necessary to balance the federal budget.
• C) a crisis in the foreign exchange market.
• D) a sharp fall in housing prices.

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Definitions:

Correct Decision

A decision made in statistical hypothesis testing that accurately reflects the true state of the world.

Type I Error

The mistake of rejecting a true null hypothesis or falsely claiming to detect an effect that does not actually exist.

Type II Error

A statistical mistake made by failing to reject a false null hypothesis; not detecting an effect or difference when there actually is one.

Test Impact

Measures the effect or change resulting from the introduction or implementation of a test or assessment.