How Do Open-Market Purchases Affect the Price Level and Real

question 8

Multiple Choice

How do open-market purchases affect the price level and real GDP?

• A) They increase the price level and real GDP.
• B) They decrease the price level and real GDP.
• C) They increase the price level and decrease real GDP.
• D) They decrease the price level and increase real GDP.

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Definitions:

Goodness-of-fit Test

A statistical test used to determine how well observed data fit a specific distribution or model.

Test of Independence

A statistical method used to determine if there is a significant association between two categorical variables.

Nonparametric Tests

Statistical tests that do not assume a specific distribution in the data and are used for ordinal or nominal data.

Spearman Rank

A non-parametric measure of rank correlation that assesses how well the relationship between two variables can be described using a monotonic function.