If the T-Stat for the Sample Estimate of a Coefficient $\frac { m _ { 1 } } { S _ { m _ { 1 } } }$

question 37

Multiple Choice

If the t-stat for the sample estimate of a coefficient, M₁ calculated as the following, t = $\frac { m _ { 1 } } { S _ { m _ { 1 } } }$ , where m₁ is the estimated coefficient and S $m _ { 1 }$ is the properly estimated standard error for the coefficient, comes out to be 2.7, what is the appropriate conclusion?

• A) Reject the null hypothesis that the population coefficient M₁ = 0 at a 99% confidence level.
• B) Fail to reject the null hypothesis that the population coefficient M₁ = 1 at a 95% confidence level.
• C) Reject the null hypothesis that the population coefficient M₁ = 2 at a 99% confidence level.
• D) None of these choices are correct.

Understand how autonomous investments affect aggregate expenditure and its impact on the economy.

Calculate and understand the implications of the simple spending multiplier based on the marginal propensity to consume and save.

Recognize how changes in the price level influence consumption, exports, and the aggregate demand curve.

Understand the relationship between the marginal propensity to consume (MPC) and the spending multiplier.

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