Question

Consider the following hypothesis: "There is no relationship between income and amount of money spent on food." If the hypothesis presented is tested using a .05 alpha level and the resulting p value is .01, which of the following interpretations of the results is most appropriate? Group of answer choices There is no relationship between income and food expenditures There is a relationship between income and food expenditures As income increases, food expenditures increase As income decreases, the percentage of income spent on food increases None of the above

Answer 1

Correct option:

"There is a relationship between income and food expenditures"

Explanation:

Te hypothesis that is tested is:

H₀: There is no relationship between income and amount of money spent on food.

Hₐ: There is a significant relationship between income and amount of money spent on food.

The significance level of the test is:

α = 0.05

The decision rule based on the p-value of the test is:

If the p-value of the test statistic is less than the significance level then the null hypothesis is rejected. And if the p-value of the test statistic is more than the significance level then the null hypothesis is failed to be rejected.

The p-value of the test is computed as,

p-value = 0.01.

The p-value = 0.01 < α = 0.05.

The null hypothesis will be rejected at 5% level of significance.

Conclusion:

As the null hypothesis is rejected it can be concluded that there is a significant relationship between income and amount of money spent on food.

Thus, the correct option is:

"There is a relationship between income and food expenditures."