If Individuals Suddenly Increase Their Withdrawals from the Banking System

question 7

Multiple Choice

If individuals suddenly increase their withdrawals from the banking system, the federal funds rate should:

• A)increase as bank reserves decline.
• B)decrease as bank reserves decline.
• C)increase as bank reserves increase.
• D)decrease as bank reserves increase.

Understand the criteria for using one-sample t-tests and Z-tests.

Distinguish between statistical tests and their applicability based on the known or unknown population standard deviation.

Interpret the results of t-tests and Z-tests in terms of statistical significance.

Recognize the use and limitations of SPSS software in statistical testing.

---

Definitions:

Tit-for-Tat Strategy

A strategy in repeated games where a player's move in the current round is the same as the opponent's move in the previous round.

Prisoners' Dilemma

A situation in game theory where two individuals acting in their own self-interest do not produce the optimal outcome, showcasing the conflict between personal and collective rationality.

Tying

Tying is a sales technique where a seller requires the purchaser of one product to also buy another, secondary product.

Monopoly

A market structure in which a single seller controls the entire supply of a product or service, and hence, the price, effectively blocking entry for any competitors.