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IRS audits The Internal Revenue Service plans to examine an SRS of individual federal
Chapter 7, Problem 20(choose chapter or problem)
IRS audits The Internal Revenue Service plans to examine an SRS of individual federal income tax returns. The parameter of interest is the proportion of all returns claiming itemized deductions. Which would be better for estimating this parameter: an SRS of 20,000 returns or an SRS of 2000 returns? Justify your answer.
Questions & Answers
QUESTION:
IRS audits The Internal Revenue Service plans to examine an SRS of individual federal income tax returns. The parameter of interest is the proportion of all returns claiming itemized deductions. Which would be better for estimating this parameter: an SRS of 20,000 returns or an SRS of 2000 returns? Justify your answer.
ANSWER:Step 1 of 2
We have to explain which SRS is better for estimating this parameter and why: