An Equal Increase in Government Purchases and Taxes Will Cause

question 35

Multiple Choice

An equal increase in government purchases and taxes will cause

• A)an increase in real GDP.
• B)no change in real GDP.
• C)an increase in the budget surplus.
• D)a reduction in cyclically adjusted budget surplus.

---

Definitions:

Convergent Validity

The construct validity of a measure is assessed by examining the extent to which scores on the measure are related to scores on other measures of the same construct or similar constructs.

Correlation Coefficient

A statistical measure that calculates the strength and direction of the relationship between two variables.

True Score

An individual’s actual score on a variable being measured, as opposed to the score the individual obtained on the measure itself.

Measurement Error

The degree to which a measurement deviates from the true score value.