The Table Below Shows the Amounts of Money That Households

question 2

Multiple Choice

The table below shows the amounts of money that households and businesses want to hold at various interest rates.

$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Interest Rate } \\( \% ) \end{array} & \begin{array} { c } \text { Quantity of money demanded } \\\text { (\$ billions) }\end{array} \\\hline 10 & 20 \\\hline 8 & 40 \\\hline 6 & 60 \\\hline 4 & 80 \\\hline 2 & 100 \\\hline\end{array}$
-If the interest rate is 6 percent while the supply of money is $80 billion,there is a:

• A)surplus of money, causing a rise in the interest rate
• B)shortage of money, causing a rise in the interest rate
• C)surplus of money, causing a fall in the interest rate
• D)shortage of money, causing a fall in the interest rate
• E)state of equilibrium, which means the interest rate is stable

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Definitions:

Sample Data

Data collected from a portion of a larger population, used to make inferences about the whole population.

P-Value

The p-value is a measure in statistical hypothesis testing representing the probability of obtaining a result at least as extreme as the observed one, assuming the null hypothesis is true.

Hypothesized Mean Difference

The presumed difference between the means of two populations or conditions being compared in a statistical hypothesis test.

Two-Tail

A term used in statistics referring to the two-tailed test of significance that checks for the possibility of positive or negative differences.