As the level of significance is changed from .01 to .05, the probability of making a type I error increases and the probability of making a type II error decreases.

Question

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Lowering the level of significance (e.g., from .01 to .05) increases the probability of rejecting the null hypothesis when it is true (Type I error) and decreases the probability of failing to reject the null hypothesis when it is false (Type II error), because the criteria for rejecting the null hypothesis become less stringent.

As the Level of Significance Is Changed from