Why Is It Usually Considered Preferable to Use Numbers Subject

question 9

Multiple Choice

Why is it usually considered preferable to use numbers subject to compensating errors rather than numbers subject to systematic errors?

• A) Compensating errors tend to cancel out when they are combined
• B) Systematic errors are caused by errors in data collection
• C) Compensating errors are more likely to be close to the true value
• D) Systematic errors are inappropriate in a research setting

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Definitions:

Income

The monetary payment received by an individual or household for their services, investments, or transfer payments.

Interest Rate

The percentage of an amount of money charged by a lender to a borrower for the use of their funds over a period of time, typically expressed as an annual percentage.

Present Value

The current worth of future cash flows discounted at an appropriate discount rate, reflecting the time value of money.

Endowment

Funding provided to an institution or individual in the form of investment income, typically aimed at supporting specific activities or maintaining long-term financial stability, differentiated here as purpose-specific funds.