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Chapter 6: Q 6E (page 339)

Explain what is meant by the statement, “We are 95% confident that an interval estimate contains μ.”

Short Answer

Expert verified

In economics, a confidence interval is an approximation of an interval that might include a population parameter. A set of numbers that is expected to encompass a population figure with a reasonable level of certainty.

Step by step solution

01

Step-by-Step Solution Step 1: Explanation

The statement expresses trust in the estimating method instead of on the specific interval determined from the data sample. It states that if this application is repeated numerous times using the identical approach, 95% of the resultant intervals will include μ.

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