The power of this test to reject p = 0.97 if 0.98 is true is 0.21. If the analyst were to decrease the significance level of the test, how would the power be affected?

Decreasing the significance level makes the test more conservative: the rejection region becomes smaller, so it is harder to reject the null hypothesis. That also makes it less likely to reject p = 0.97 when p = 0.98 is true, so the power decreases. The correct choice is “It would decrease.”

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