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Answer: III
The correct answer is C (III). **Explanation:** A two-sided test (also called a two-tailed test) examines whether there is a significant difference in either direction from the null hypothesis. The key distinction between one-sided and two-sided tests lies in the alternative hypothesis: - **One-sided tests** look for changes in only one specific direction (either increase or decrease) - **Two-sided tests** look for changes in either direction (both increase and decrease) Analyzing each option: 1. **Option I:** H₁ states "Bonuses improve job performance" - This is a one-sided test looking only for improvement. 2. **Option II:** H₁ states "Bonuses reduce job performance" - This is a one-sided test looking only for reduction. 3. **Option III:** H₁ states "Bonuses affect job performance" - The word "affect" is non-directional, meaning it could be either improvement or reduction. This implies a two-sided test. 4. **Option IV:** H₁ states "Bonuses improve job performance" - This is a one-sided test looking only for improvement. The alternative hypothesis in set III uses the word "affect," which leaves open the possibility of either an increase or a decrease in job performance, making it the only two-sided test among the options.
Author: Nikitesh Somanthe
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An investment firm intends to carry out a test to determine whether bonuses have any significant effect on job performance. The head of the human resource department develops the following sets of possible hypotheses.
I. H₀: Bonuses do not have any effect on job performance
H₁: Bonuses improve job performance
II. H₀: Bonuses do not have any effect on job performance
H₁: Bonuses reduce job performance
III. H₀: Bonuses do not have any effect on job performance
H₁: Bonuses affect job performance
IV. H₀: Bonuses have no effect on job performance
H₁: Bonuses improve job performance
Which of the above pairs of hypotheses implies a two-sided test?
A
I
B
II
C
III
D
IV