The Difference Between the Sample Variance and the Variance Estimate

question 53

Multiple Choice

The difference between the sample variance and the variance estimate is that the variance estimate _____:

• A)underestimates the population variance
• B)is computed with N-1 in the denominator
• C)is computed with the degrees of freedom in the denominator
• D)both b and c

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Definitions:

Base Year

A reference point in time used for comparative purposes, particularly in the context of economic and financial indices.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, changing over time.

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy, indicating how much of the change in the gross domestic product can be attributed to changes in the price level.

Substitution Bias

A phenomenon where consumers alter their consumption preferences in response to relative price changes, potentially misrepresenting inflation measurements.