KEY TERMS

Hypothesis
statement about the value of a population parameter, in case of two hypotheses, the statement assumed to be true is called the null hypothesis (notation H₀) and the contradictory statement is called the alternative hypothesis (notation H_a).

Hypothesis Testing
Based on sample evidence, a procedure for determining whether the hypothesis stated is a reasonable statement and should not be rejected, or is unreasonable and should be rejected.

Level of Significance of the Test
probability of a Type I error (reject the null hypothesis when it is true). Notation: α. In hypothesis testing, the Level of Significance is called the preconceived α or the preset α.

p-value
the probability that an event will happen purely by chance assuming the null hypothesis is true. The smaller the p-value, the stronger the evidence is against the null hypothesis.

Type 1 Error
The decision is to reject the null hypothesis when, in fact, the null hypothesis is true.

Type 2 Error
The decision is not to reject the null hypothesis when, in fact, the null hypothesis is false.