The Figure Shows Planned Aggregate Expenditure and Output for an Economy

question 45

Multiple Choice

The figure shows planned aggregate expenditure and output for an economy. If output in this economy is Y₁, there should be _______ in production because PAE is _______ actual output.

• A) an increase; less than
• B) an increase; greater than
• C) no change; equal to
• D) a decrease; greater than

---

Definitions:

Factor A

A variable manipulated by the researcher in an experiment to observe its effect on the dependent variable; often used in the context of factorial designs.

MSA

An abbreviation for Metropolitan Statistical Area, which is a geographical region with a relatively high population density at its core and close economic ties throughout the area.

Critical Value

A point on the scale of a test statistic beyond which the null hypothesis is rejected in favor of an alternative hypothesis.

Interaction Effect

A statistical phenomenon where the effect of one independent variable on a dependent variable depends on the level of another independent variable.