As a Rule of Thumb, the Sampling Distribution of the Sample

question 52

Multiple Choice

As a rule of thumb, the sampling distribution of the sample proportions can be approximated by a normal probability distribution whenever

• A) np \(\ge\)5, n \(\ge\)30.
• B) np \(\ge\)5 and n(1-p) \(\ge\)5.
• C) n \(\geq\) 30 and (1 - p) = 0.5.
• D) none of these alternatives is correct.

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Definitions:

Required Reserves

The minimum amount of reserves a bank must hold, as mandated by regulatory bodies, based on a percentage of the bank's deposit liabilities.

Money Supply

The total quantity of money available in the economy at a given time, including currency, deposits, and other liquid assets.

Required Reserve Ratio

The proportion of deposits that banks are required to hold in reserve and not lend out.

Required Reserve Ratio

The fraction of deposits that banks must hold in reserve, either in their vaults or with the central bank, to ensure bank liquidity.