Assuming an Upward-Sloping AS Curve,if an Economy Is at Full

question 136

Multiple Choice

Assuming an upward-sloping AS curve,if an economy is at full employment and investment spending decreases while all other levels of spending remaining constant,then

• A)A GDP gap emerges.
• B)The price level increases.
• C)Output increases.
• D)The unemployment rate falls.

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Definitions:

Simple Linear Regression Model

A statistical method that models the relationship between a dependent variable and one independent variable by fitting a linear equation to observed data.

Slope

In mathematics, the measure of the steepness, incline, or grade of a straight line, calculated as the ratio of vertical change to horizontal change between two points on the line.

Regression Analysis

A set of statistical processes for estimating the relationships among variables.

Least Squares Line

A line that minimizes the sum of the squares of the vertical distances of the points from the line, used in linear regression analysis.