4. An economist would recommend that the Bank of Canada change the interest rate for borrowed money if the average annual inflation rate is less than 2.15%. Based on a sample from the past 21 years, the average annual inflation rate was 1.87%, with a standard deviation of 0.67%. Assume the population is approximately normally distributed.

a) Compute the observed value of the test statistic.

b) Determine the p-value to within table accuracy. If your test statistic is z-distributed, this will be an exact value; if your test statistic is t-distributed, indicate the tightest possible bounds on the p-value.