Which of the Following Is the Strongest Evidence of a Shift

question 59

Multiple Choice

Which of the following is the strongest evidence of a shift toward a more expansionary fiscal policy?

• A) an increase in government spending as a share of the economy and an expansion in the size of the budget deficit
• B) a reduction in government spending as a share of the economy and a shift of the budget toward a surplus
• C) an increase in government spending as a share of the economy and a shift of the budget toward a surplus
• D) a reduction in government spending as a share of the economy and an expansion in the size of the budget deficit

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Definitions:

Error Term

The part of an observation in regression analysis that the model does not explain, often considered as random noise.

Expected Value

The predicted average of a random variable, calculated by multiplying each possible outcome by its probability and summing the results.

Random Variable

A variable whose possible values are numerical outcomes of a random phenomenon.

Regression Equation

A formula derived from regression analysis that predicts the dependent variable based on the values of one or more independent variables.