When a $10 Check Written on the First National Bank

question 27

Multiple Choice

When a $10 check written on the First National Bank is deposited in an account at the Second National Bank,then

• A) the liabilities of the First National Bank decrease by $10.
• B) the liabilities of the Second National Bank increase by $10.
• C) the reserves of the First National Bank increase by $10.
• D) all of the above occur.
• E) only A and B of the above occur.

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Definitions:

Critical Value

A point on the scale of the test statistic beyond which we reject the null hypothesis; it marks the boundary for deciding whether an observed test statistic is extreme.

Null Hypothesis

A statement used in statistical testing that assumes no significant difference or relationship exists between specified populations.

Standard Error

The standard deviation of the sampling distribution of a statistic, commonly used to measure the precision of the sample mean estimate.

Population Average

The mean of all observations or values in a population.