In the Lagos-Wright Model, Inflation Rises When

question 28

Multiple Choice

In the Lagos-Wright model, inflation rises when

• A)there is a level increase in the money supply.
• B)unemployment falls.
• C)the bargaining power of buyers declines.
• D)aggregate output rises.
• E)money growth increases.

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Definitions:

Critical Value Approach

A method of statistical testing which involves comparing the calculated value of a test statistic to a critical value to decide whether or not to reject the null hypothesis.

Null Hypothesis

A statement used in statistics that proposes there is no significant difference or effect, serving as the default assumption to be tested against an alternative hypothesis.

Test Statistic

A statistic (a function of the data) used in statistical hypothesis testing to decide whether to reject the null hypothesis.

P-value Approach

A method in hypothesis testing that uses the p-value, the probability of obtaining test results at least as extreme as the observed, under the assumption the null hypothesis is true.