In the Short Run, an Increase in Government Expenditure on Goods

question 89

Multiple Choice

In the short run, an increase in government expenditure on goods and services ________ real GDP and ________ the price level.

• A) increases; rises
• B) increases; falls
• C) decreases; rises
• D) decreases; falls

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Definitions:

Strong Negative Correlation

A relationship between two variables in which one variable increases as the other decreases, with a correlation coefficient close to -1.

Correlation Coefficient

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

Variables

Elements, features, or factors that can change and have different values in a research study, affecting the outcomes and interpretations.

Correlation Coefficient

A statistical measure that indicates the extent to which two or more variables fluctuate together, showing the strength and direction of a linear relationship between them.