One of the Factors That a Company Will Use in Determining

question 137

Essay

One of the factors that a company will use in determining whether it will locate a new facility in a community is the status of the real estate market. The managers believe that an important measure of the real estate market is the average length of time that homes stay on the market before selling. They believe that if the mean time on the market is less than 45 days, the real estate market is favorable. To test this in a particular area, a random sample of n = 100 homes that sold during the past six months was selected. The mean for this sample was 40 days. It is believed that the population standard deviation is 15 days. If the test is conducted using a 0.05 level of significance, what conclusion should be reached?

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Definitions:

Rational Expectationists

Economists who believe that individuals make decisions based on their rational outlook, available information, and past experiences.

Monetary Policy

The process by which the monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.

Say's Law

An economic principle that asserts that supply creates its own demand, meaning that production of goods and services creates an equal amount of demand for those goods and services.

Classical Economics

Laissez-faire economics. Our economy, if left free from government interference, tends toward full employment. The prevalent school of economics from about 1800 to 1930.