An engineer has designed a valve that will regulate water pressure on an automobile engine. The valve was tested on 120 engines and the mean pressure was 5.4 pounds/square inch (psi). Assume the population standard deviation is 0.8. If the valve was designed to produce a mean pressure of 5.6 psi, is there sufficient evidence at the 0.02 level that the valve does not perform to the specifications?

: Identify the level of significance for the hypothesis test.