In Order to Set Rates, an Insurance Company Is Trying

question 84

Multiple Choice

In order to set rates, an insurance company is trying to estimate the number of sick days that full time workers at an auto repair shop take per year. A previous study indicated that the standard deviation was 2.8 days. How
Large a sample must be selected if the company wants to be 95% confident that the true mean differs from the
Sample mean by no more than 1 day?

• A)31
• B)141
• C)512
• D)1024

---

Definitions:

Aggregate Demand

Cumulative need for every type of good and service in an economy, observed at a consistent overall price point across a chosen period.

Money Supply

The total economic monetary resources present at a specific time.

Money Demand

The desired holding of financial assets in the form of money (cash and demand deposits) that can be easily exchanged for goods and services.

Money Supply

The aggregate amount of monetary assets available for use in an economy at a given time.