The Federal Open Market Committee's "Balance of Risks" Is an Assessment

question 68

Multiple Choice

The Federal Open Market Committee's "balance of risks" is an assessment of whether,in the future,its primary concern will be

• A)higher exchange rates or higher unemployment.
• B)higher inflation or a stronger economy.
• C)higher inflation or a weaker economy.
• D)lower inflation or a stronger economy.

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Definitions:

Chi-square Statistic

A statistical test used to compare observed data with data we would expect to obtain according to a specific hypothesis.

Significance Level

A threshold in hypothesis testing that determines the probability of rejecting the null hypothesis when it is actually true, often denoted by alpha (α).

Null Hypothesis

A hypothesis that suggests no statistical significance exists in a set of given observations, representing a default position to be tested against.

Probability Distributions

A function in mathematics that characterizes the probability of achieving any given value that a random variable might take on.