In April of 2011,the unemployment rate in Canada was reported to be 7.6%.Suppose that Statistics Canada claims that the current unemployment rate is lower than that of April 2011.Suppose you wish to conduct a test to determine if the current unemployment rate is lower than that of April 2011.Identify the Type II error in this context.
A)You conclude that the unemployment rate has increased.
B)You conclude that there in no change in unemployment,but in fact the unemployment rate is decreasing.
C)You conclude that unemployment is declining since the unemployment rate can only decrease.
D)You conclude that unemployment is on the decline,but in fact there is no change in unemployment.
E)A Type II error is not possible in this situation.

Question

Quizplus · Accepted Answer

A Type II error occurs when we fail to reject a null hypothesis that is actually false. In this context, the null hypothesis would be that the current unemployment rate is not lower than that of April 2011. So, if we commit a Type II error, we would conclude that there is no change in unemployment (i.e., fail to reject the null hypothesis) even though the unemployment rate is actually decreasing. Option B is the only choice that describes this situation.

In April of 2011,the Unemployment Rate in Canada Was Reported