Over the past half-century, the increase in incomes and decline in hours worked have allowed American...

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Over the past half-century, the increase in incomes and decline in hours worked have allowed American consumers to enjoy more leisure time and increase their spending on entertainment. After graduating from the Walton College of Business, you were hired by Ajax consulting company. Because you earned an “A” in Data Analysis and Interpretation, you’ve be assigned to a project team that is working with several local companies in the entertainment industry. The project manager has assigned you the task of building a statistical model to quantify the relationship, if one exists, between a family’s annual expenditure on entertainment and their annual income. She provided you a dataset consisting of a random sample of 20 families, collected last year, to help you with the assessment. The dataset consisted of the annual income of the families as well as the amount their entertainment expenditures in the following format:

Expenditure	Income
2400	41200
1450	37500
2650	50100
2020	36900
…	…

You performed a regression analysis using MS Excel and obtained the output below:

SUMMARY OUTPUT Regression Statistics Multiple R 0.875256373 R Square 0.766073718 Adjusted R Square 0.753077814 Standard Error

In this study, what would happen to the probability of making a Type I error if you use a significance level of .01 instead of .05?

Group of answer choices:

It goes up

It goes down

It does not change

It depends on the p-value

math Statistics-And-Probability

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Answer 1

Answer #1

alpha is the probability of making a type i error

hence

if we choose alpha = 0.01 instead of alpha = 0.05

type i probability will go down

It goes down

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Answer 2

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