Which of the Following Statements Is Incorrect

question 169

Multiple Choice

Which of the following statements is incorrect?

• A)Given the economy's MPS, a $15 billion reduction in government spending will reduce the equilibrium GDP by more than would a $15 billion increase in taxes.
• B)Other things unchanged, a tax reduction of $10 billion will increase the equilibrium GDP by $25 billion when the MPS is 0.4.
• C)If the MPC is 0.8 and GDP has declined by $40 billion, this was caused by a decline in aggregate expenditures of $8 billion.
• D)A government surplus is anti-inflationary; a government deficit is expansionary.

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Definitions:

Validity

The extent to which a test, tool, or research accurately measures what it is intended to measure.

Reliability

The consistency of a measure or assessment tool in producing stable results over time.

Maturation

The process of becoming mature; the process of developing in the body or mind naturally over time.

Culture

The shared values, customs, and social practices of a particular group or society that influence behavior and perceptions.