A Major Department Store Chain Is Interested in Estimating the Average

question 108

Multiple Choice

A major department store chain is interested in estimating the average amount its credit card customers spent on their first visit to the chain's new store in the mall. Fifteen credit card accounts were randomly sampled and analyzed with the following results: = $50.50 and S² = 400. Assuming the distribution of the amount spent on their first visit is approximately normal, what is the shape of the sampling distribution of the sample mean that will be used to create the desired confidence interval for μ?

• A) approximately normal with a mean of $50.50
• B) a standard normal distribution
• C) a t distribution with 15 degrees of freedom
• D) a t distribution with 14 degrees of freedom

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Definitions:

Fiat Money

A form of money officially accepted as legal tender, not supported by a real commodity, as declared by authorities.

Commodity Money

Money whose value comes from a commodity of which it is made, such as gold or silver, with intrinsic value.

Inflation

The rate at which the general level of prices for goods and services is rising, leading to a decrease in purchasing power.

Open Market Committee

A committee within the Federal Reserve that is responsible for overseeing the country's open market operations, including the buying and selling of government securities to manage the money supply and influence interest rates.