Suppose the Consumption Function Is Represented as Follows: C =

question 24

Multiple Choice

Suppose the consumption function is represented as follows: C = 200 + 0.75Y. If Y increases by $100, then consumption would increase by:

• A) $70.
• B) $75.
• C) $80.
• D) $90.

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Definitions:

Chi-Squared Test

A statistical method employed to assess if the observed frequencies significantly differ from the expected frequencies across one or more categories.

Nominal Data

A type of categorical data for which the categories do not have a natural order or ranking.

Critical Value

A point on the scale of the test statistic beyond which we reject the null hypothesis; it depends on the chosen significance level.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, usually set before the experiment.