How does the Central Limit Theorem relate to the use of Z-tests?

  • It allows for the assumption that the sample mean distribution is normally distributed
  • It enables the calculation of the sample standard deviation
  • It increases the power of the test
  • It reduces the impact of outliers in the sample
The Central Limit Theorem states that, with a large enough sample size, the distribution of the sample mean will be approximately normally distributed. This allows us to use Z-tests even when the population is not normally distributed.
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