**Core Concept**
Rinne's test assesses the relative intensity of air conduction (AC) versus bone conduction (BC) in the ear, helping to distinguish between conductive and sensorineural hearing losses. It involves comparing the loudness of a 512 Hz or 1024 Hz tuning fork heard by air conduction versus bone conduction.

**Why the Correct Answer is Right**
A negative Rinne's test indicates that bone conduction is better than air conduction, suggesting a conductive hearing loss. This occurs when there is a problem with the transmission of sound through the middle ear, such as otosclerosis, a perforated eardrum, or a middle ear infection. In conductive hearing loss, the inner ear and the auditory nerve are functioning normally, but sound is not being efficiently conducted to the inner ear.

**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect because a positive Rinne's test would indicate that air conduction is better than bone conduction, which is the opposite of what is observed in conductive hearing loss.
**Option B:** This option is incorrect because sensorineural hearing loss would result in a positive Rinne's test, as air conduction is better than bone conduction in sensorineural hearing loss.
**Option C:** This option is incorrect because middle ear effusion would result in a flat or reduced bone conduction, not better than air conduction.

**Clinical Pearl / High-Yield Fact**
In clinical practice, it's essential to remember that a negative Rinne's test can indicate conductive hearing loss, while a positive Rinne's test suggests sensorineural hearing loss.

**Correct Answer: C. Middle ear effusion**