When the Sample Standard Deviation Is Used to Construct a Confidence

question 41

True/False

When the sample standard deviation is used to construct a confidence interval for the mean, we would use the Student's t distribution instead of the normal distribution.

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Definitions:

Deposit Expansion Multiplier

The ratio that measures the potential increase in total deposits in the banking system generated from an increase in primary deposits.

Excess Reserves

Funds that banks hold over and above the required reserve ratio set by a central banking authority, often for safety or emergency purposes.

Reserve Requirements

The minimum amount of reserves that a bank must hold as mandated by a central bank, affecting the bank's ability to lend.

Glass-Steagall Act

A 1933 law creating a regulatory firewall between commercial and investment banking sectors to prevent financial crises.