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There is $5,000,000 of currency in Econland, all held by banks as reserves. The public does not hold any currency. If the banks' desired reserve/deposit ratio is 0.25, then the money supply equals:
Two-tailed Test
A hypothesis test where the area of interest is in both tails of the probability distribution, allowing for investigating deviations in two opposite directions.
T Distribution
A probability distribution that arises when estimating the mean of a normally distributed population in situations where the sample size is small and population variance is unknown.
One-tailed Test
A statistical hypothesis test in which the region of rejection is on only one side of the sampling distribution, used when the research hypothesis predicts a direction of the effect.
Sample Size
The number of observations or data points collected in a sample from a population for the purpose of statistical analysis.
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