For This Question,assume That the Fed Is Expected to Respond

question 41

Multiple Choice

For this question,assume that the Fed is expected to respond to any event by keeping the interest rate constant (i.e.,equal to its initial level) .An unexpected tax increase will cause

• A)stock prices to fall.
• B)stock prices to rise.
• C)no change in stock prices.
• D)an ambiguous effect on stock prices.

---

Definitions:

Alpha

Often referred to as the level of significance in hypothesis testing, it represents the threshold at which the null hypothesis is rejected.

T-test

A statistical test used to compare the mean of two groups to see if there is a significant difference between them.

Null Hypothesis

The hypothesis that there is no significant difference between specified populations, any observed difference being due to sampling or experimental error.

Alpha

The threshold of probability at which the null hypothesis is rejected in statistical testing, often set at 0.05.