If Spending Decreases by $400, and GDP Decreases by $1,000

question 120

Multiple Choice

If spending decreases by $400, and GDP decreases by $1,000 as a result, what must the MPC be?

• A) 0.6
• B) 0.75
• C) 4
• D) 2.5

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Definitions:

Standard Error

A statistical measure that quantifies the amount of variation or dispersion of a sample mean relative to the true population mean.

Sample Size

The number of observations or participants in a statistical sample.

Slope

In mathematics, it is the measure of the steepness or inclination of a line, representing the ratio of the vertical and horizontal changes between two points on the line.

Residual

The difference between an observed value and the estimated value of the quantity of interest in a statistical model.