In the Basic AD-SRAS Model, the Assumption Is Made That

question 27

Multiple Choice

In the basic AD-SRAS model, the assumption is made that

• A)bank loans are imperfect substitutes for other forms of finance.
• B)all sources of finance are perfect substitutes.
• C)the real interest rate overstates the cost of funds to borrowers.
• D)the real interest rate understates the cost of funds to borrowers.

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Definitions:

Point Estimate

A single value given as the best guess or estimate of a population parameter based on sample data.

Interval Estimate

An interval estimate is a range of values derived from sample statistics that is likely to contain the value of an unknown population parameter.

Population Parameter

A numerical value summarizing the entire population that can often be estimated by a statistic derived from a sample.

Margin of Error

The maximum expected difference between the true population parameter and a sample estimate of that parameter.