Which statement is true about significance level?

Which statement is true about significance level?

• A. The desired significance level is usually 0.05.
• B. It is always 0.01.
• C. It is chosen after the data are collected.
• D. It is the same as the p-value.

Answer: (A)

The significance level is the threshold you set before collecting data to decide whether an observed effect is unlikely enough to reject the null hypothesis. It is typically chosen in advance and often set at 0.05 because this value provides a reasonable balance between detecting real effects and limiting false positives. It isn’t fixed at 0.01, and it isn’t determined after you’ve seen the data. It’s not the same as the p-value—that number is calculated from your data and tells you how probable your observed result would be if the null were true; you compare the p-value to the significance level to make a decision.

The significance level is the threshold you set before collecting data to decide whether an observed effect is unlikely enough to reject the null hypothesis. It is typically chosen in advance and often set at 0.05 because this value provides a reasonable balance between detecting real effects and limiting false positives. It isn’t fixed at 0.01, and it isn’t determined after you’ve seen the data. It’s not the same as the p-value—that number is calculated from your data and tells you how probable your observed result would be if the null were true; you compare the p-value to the significance level to make a decision.