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The Bureau of Economic Analysisin the U.S. Department of Commerce reported that the mean annual income...

The Bureau of Economic Analysisin the U.S. Department of Commerce reported that the mean annual income for a resident of North Carolina is $18,688 (USA Today, August 24, 1995). A researcher for the state of South Carolina wants to see if the mean annual income for a resident of South Carolina is different. A sample of 400 residents of South Carolina shows a sample mean annual income of $16,860 and the population standard deviation is assumed to known, =$14,624. Use a 0.05 level of significance, the researcher wants to test the following hypothesis.H0:= 18,688Ha:18,688a.What are three rejection rules (You have used confidence interval approach in Question 2)? b.Do three rejection rules lead to the same conclusion? What is your conclusion?

Solutions

Expert Solution

b. From a) we can say that three rejection rules lead to the same conclusion.

Conclusion:  We can conclude that there is a significant difference in mean annual income between the state of South Carolina and North Carolina at 0.05 level of significance.


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