Final answer:
The statement is true; if the number of accidents decreases with an increase in the driver's age, the scatter diagram would show a negative relationship between age and the number of accidents.
Step-by-step explanation:
If an insurance company believes that for drivers between 16 years of age and 60 years of age, the number of accidents per year decreases as age increases, this would imply a negative correlation between age and the number of accidents.
A scatter diagram plotting the age of drivers (independent variable) on the x-axis and the number of accidents per year (dependent variable) on the y-axis should illustrate this relationship. If the data points tend to show that the number of accidents decreases as the age increases, the pattern of dots sloping downward from left to right would reflect a negative relationship.
Hence, if the insurance company's belief is correct, the statement that the scatter diagram should show a negative relationship between the two variables is True.