Twenty Economists Were Sampled and Asked to Predict If the National

question 24

Multiple Choice

Twenty economists were sampled and asked to predict if the national economy would improve during the next 12 months. Eleven of the economists predicted an increase,two economists predicted no change,and seven economists predicted a decrease in the economy. Conduct a hypothesis test at the 0.10 significance level to determine if the majority of economists predict an increase. The correct analysis would be a ________.

• A)sign test based on the binomial distribution
• B)sign test based on the standard normal distribution
• C)chi-square test
• D)Wilcoxon signed-rank test

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Definitions:

Equity-Financed

Pertains to the method of raising capital by selling company shares rather than borrowing funds.