Discussion
Setting the P value at 0.01 increases the chances of making a :
Answer: B
A stricter significance level increases the chance of a Type II error.
A Type I error is rejecting a true null hypothesis, and its probability equals the significance level. Moving the level from 0.05 to 0.01 makes it harder to reject the null hypothesis, which reduces the risk of a Type I error.
The price is that a real effect is more likely to be missed: failing to reject a false null hypothesis is a Type II error, so its probability rises. A Type III error, the right answer to the wrong question, is not affected by the significance level.
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