In a Normal Approximation to the Sign Test, the Standardized

question 115

Multiple Choice

In a normal approximation to the sign test, the standardized test statistic is calculated as z = -1.58. To test the alternative hypothesis that the location of population 1 is to left of the location of population 2, the p-value of the test is:

• A) 0.1142
• B) 0.2215
• C) 0.0571
• D) 0.2284

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Definitions:

Loanable Funds

The funds available for borrowing in the financial markets, consisting of savings and sometimes bank loans that are available to be lent to businesses and individuals.

Interest Rate

The rate at which borrowers are charged for accessing assets, specified as a percentage of the original sum borrowed.

Desired Saving

The portion of income that households choose to save rather than spend on consumption.

Desired Investment

The level of investment that firms plan or wish to undertake based on their expectations of future economic conditions.