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This lesson is a part of the course Hypothesis Testing
A decision rule is the rule based on which the null hypothesis is rejected or not rejected.
We first state the hypothesis. Then we determine if it is a one-tailed or a two tailed test. We then specify a significance level, and calculate the test statistic. Now we calculate the critical value. If the test statistic follows a normal distribution, we determine critical value from the standard normal distribution, i.e., the z-statistic. Using the test statistic and the critical value, the decision rule is formulated.
