The Set of fiScal Policies That Would Be Most Contractionary

question 152

Multiple Choice

The set of fiscal policies that would be most contractionary would be a(n)

• A) increase in government spending and taxes.
• B) decrease in government spending and taxes.
• C) increase in government spending and a decrease in taxes.
• D) decrease in government spending and an increase in taxes.

---

Definitions:

Least Squares Regression

A statistical method used to find the line of best fit by minimizing the sum of the squares of the residuals between observed and estimated values.

Rain

Precipitation in the form of liquid water drops that have diameters greater than 0.5 millimeters.

Scatter Diagram

A graphical representation of two variables' values to observe any correlations, with individual data points plotted on a two-dimensional plane.

Linear Model

A type of regression model that assumes a linear relationship between the independent and dependent variables.