The board of a national central bank is meeting to decide if it should increase

Question

The board of a national central bank is meeting to decide if it should increase interest rates in order to discourage spending. State the null and alternative hypotheses regarding spending that the board would formulate to guide its decision.

What are the null and alternative hypotheses?

A. H0: Increase interest rates in order to discourage spending.

H1:Reduce interest rates in order to discourage spending.

B. H0: No change in interest rates is warranted.

H1: Change interest rates in order to discourage spending.

C. H0: Reduce interest rates in order to discourage spending.

H1: Increase interest rates in order to discourage spending.

D. H0: No change in interest rates is warranted.

H1: Increase interest rates in order to discourage spending.

Explanation / Answer

The correct option is Option-D)

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