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The way the question is worded, this is a two tailed test.The alternative hypothesis is not H_a: M > 7 because in a two-tailed test the alternative is =, while < and > indicate one-tailed tests. A test statistic is calculated by subtracting the hypothesized parameter from the parameter that has been estimated and dividing the difference by the standard error of the sample statistic. Here, the test statistic = (sample mean – hypothesized mean) / (standard error of the sample statistic) = (5 - 7) / (1) = -2. The calculated Z is -2, while the critical value is -1.96. The calculated test statistic of -2 falls to the left of the critical Z-statistic of -1.96, and is in the rejection region. Thus, the null hypothesis is rejected and the conclusion is that the sample mean of 5 is significantly different than 7. What the negative sign shows is that the mean is less than 7; a positive sign would indicate that the mean is more than 7. The way the null hypothesis is written, it makes no difference whether the mean is more or less than 7, just that it is not 7.