After Testing a Hypothesis, We Decided to Reject the Null

question 109

Multiple Choice

After testing a hypothesis, we decided to reject the null hypothesis. Thus, we are exposed to:

• A)Type I error.
• B)Type II error.
• C)Either Type I or Type II error.
• D)Neither Type I nor Type II error.

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Definitions:

Firms

Businesses or economic entities engaged in commercial, industrial, or professional activities.

Substitution Bias

The distortion in calculating inflation that occurs when consumers switch their spending from higher-priced goods to lower-priced alternatives.

CPI

CPI, or Consumer Price Index, measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Cost Of Living

refers to the amount of money needed to cover basic expenses such as housing, food, taxes, and healthcare in a certain location and time period.