If Both Government Spending and Taxes Increase by an Equal

question 75

Multiple Choice

If both government spending and taxes increase by an equal amount at the same time, GDP will:

• A) decrease.
• B) remain the same.
• C) increase.
• D) none of the above are true, it is impossible to say.

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Definitions:

Regression Line

A line that attempts to predict the relationship between two variables by minimizing the distance between the line and all the data points.

Slope

In the context of linear regression, it's the angle of the line of best fit, showing the rate of change between variables.

SSE

The sum of squared errors between observed and predicted values in statistical models, indicating the model's accuracy.

SST

Total Sum of Squares, a measure of the total variation in a dataset.