The critical value of z separates the rejection region from the nonrejection region while observed value of z is the value calculated for a sample statistic such as x.
A critical value of z is used when the sampling distribution is normal, or close to normal. The critical value of z refers to the point that cuts off area under graph for the standard normal distribution separating the rejection and nonrejection region of the data. The Critical value of z can indicate what probability any particular variable will have. These values are typically obtained from a table such as the standard normal distribution table. The observed value of z is a value determined for a sample statistic x. It is a test statistic for Z-tests that measures the difference between an observed statistic and its hypothesized population parameter in units of the standard deviation.
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