Answer:
(A) When the sample size increases, both α and β may decrease.
Explanation:
Which of the following is correct?
(A) This option is right.
When a sample's size increases, the values for alpha and beta may decrease; if and only if sample size is the denominator in the slope equation (in each case) and the numerator stays the same (that is, ceteris paribus; all other things being equal). The larger the denominator, the smaller the slope value for alpha and beta.
(B) This option is wrong
Type 2 error can only occur when you fail to reject a true H0
(C) This option is wrong
Type 1 error can only occur if or when you don't reject a false H0
(D) This option is wrong
The level of significance is the probability of a Type 1 error, not the probability of a Type 2 error.