Suppose Real GDP Increases from $13 Trillion to $14 Trillion

question 53

Multiple Choice

Suppose real GDP increases from $13 trillion to $14 trillion. As a result, consumption expenditure increases from $13 trillion to $13.75 trillion. This result implies the MPS equals

• A) 0.25.
• B) 0.75.
• C) 0.
• D) some amount that cannot be determined without more information.

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Definitions:

Modality

Value or values of a variable that have the highest frequency in a set of data.

Directional Hypothesis

A specific type of hypothesis that stipulates the direction of the expected relationship between variables (e.g., 'greater than', 'less than').

Non-directional Hypothesis

A hypothesis that predicts a relationship between variables without specifying the direction of the relationship.

Two-tailed

Involves hypotheses testing that considers both directions of differences (greater than or less than) without specifying which direction.