What Is the Most Appropriate Test to Evaluate Whether a Government-Spending

question 101

Multiple Choice

What is the most appropriate test to evaluate whether a government-spending program will improve living standards and lead to higher income levels?

• A) The total number of jobs created by the program.
• B) The value of the output generated by the government-spending program compared to its opportunity cost.
• C) The reduction in the rate of unemployment as the result of the spending on the program.
• D) The taxes necessary to finance the program compared to the revenues generated by the additional employment created by the program.

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Definitions:

Two Categories

Descriptive of data or entities that can be divided into two distinct groups.

Chi-squared Goodness-of-fit

A statistical test used to determine if observed data matches the expected distribution of a given hypothesis.

Chi-squared Tests

Statistical tests used to determine if there is a significant difference between observed frequencies and the frequencies expected under a specific hypothesis.

Nominal Data

Categorical data that cannot be logically ordered or ranked.