Which of the Following Is NOT an Argument for the Federal

question 10

Multiple Choice

Which of the following is NOT an argument for the Federal Reserve paying interest on excess reserve holdings?

• A) Paying interest reduces the effective tax on deposits.
• B) Paying interest will help in the implementation of monetary policy.
• C) Paying interest will help the Federal Reserve have more control of the amount of discount loans.
• D) Paying interest increases the capacity of the Fed's balance sheet which will make it easier to address financial crises.

---

Definitions:

Null Hypothesis

In statistics, it's the hypothesis that there is no effect or no difference, and it is tested against an alternative hypothesis.

Mean Difference

The average difference between two sets of numbers or measurements, often used to compare the means from two samples.

T-distribution

A type of probability distribution that is symmetric and bell-shaped, but with heavier tails, used especially in scenarios with smaller sample sizes.

Degrees of Freedom

The number of independent pieces of information available to estimate another piece of information or parameters in a dataset.