Which of the Following Changes Would Clearly Increase the Supply

question 19

Multiple Choice

Which of the following changes would clearly increase the supply of money in the banking system?

• A)​an increase in the percentage of money people want to hold as currency and a decrease in the fraction of deposits banks want to hold as excess reserves
• B)​an increase in the percentage of money people want to hold as currency and an increase in the fraction of deposits banks want to hold as excess reserves
• C)​a decrease in the percentage of money people want to hold as currency and a decrease in the fraction of deposits banks want to hold as excess reserves
• D)​a decrease in the percentage of money people want to hold as currency and an increase in the fraction of deposits banks want to hold as excess reserves

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Definitions:

Null Hypothesis

A statistical hypothesis that assumes no effect or no difference between phenomena or populations.

Chi-square Test

A statistical test used to determine the difference between observed and expected frequencies in one or more categories.

Categorical Variables

Variables that represent categories and can take on a limited and usually fixed number of possible values, distinguishing items by non-numeric attributes.

Chi-square Statistic

A measure used in statistics to evaluate the goodness of fit between observed frequencies and expected frequencies in categorical data.