Automatic Fiscal Policy Is at Work If, as Real GDP

question 4

Multiple Choice

Automatic fiscal policy is at work if, as real GDP increases,

• A) transfer payments decrease and interest rates decrease.
• B) transfer payments increase and tax revenues decrease.
• C) tax revenues increase and transfer payments decrease.
• D) tax revenues decrease and interest rates increase.

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Definitions:

Effect Size

A quantitative measure of the magnitude of the experimental effect, indicating how large the difference is between groups.

Association

A connection or relationship between two or more variables, where changes in one variable relate to changes in another.

Variables

Elements or characteristics in research that can change or vary, often categorized as dependent or independent.

Correlation Coefficient

A numeric metric that determines the intensity and orientation of a linear association between two numerical variables.