The Adverse Impact of a Negative Aggregate Demand Shock Is

question 20

Multiple Choice

The adverse impact of a negative aggregate demand shock is reduced when the government does not target the deficit because

• A) targeting the deficit causes further negative aggregate demand shocks.
• B) negative aggregate demand shocks do not affect the deficit.
• C) the economy is always producing potential output.
• D) not targeting the deficit causes positive aggregate demand shocks.

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Definitions:

Unknown Parameter

A value within a statistical model that is not observed directly but is estimated from the data.

P-Value

The possibility of observing test findings that are as extreme or more so than the actual findings, under the condition that the null hypothesis is valid.

Average Student

A middle or typical student, usually considered in terms of academic achievement, not necessarily referring to the mean score or mean performance.

Final Comprehensive Exam

A cumulative test covering material from an entire course or series of courses, typically given at the end of an academic term or program.