When the Fed Wants to Encourage Businesses to Increase Their

question 24

True/False

When the Fed wants to encourage businesses to increase their spending on long-term projects, it may use a stimulative policy focused on reducing long-term Treasury yields.

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Definitions:

Null Hypothesis

A default premise stating no statistical significance or effect, used as a starting point for hypothesis testing to be either rejected or not rejected.

Z Statistic

A statistical measure that quantifies the distance (in standard deviation units) a data point is from the mean of a data set.

Normal Distribution

Normal Distribution is a continuous probability distribution characterized by a symmetric, bell-shaped curve, where mean, median, and mode are equal.

Two-tailed Hypothesis Test

A statistical test in which the critical area of a distribution is two-sided and tests whether a sample is greater than or less than a certain range of values.