Autonomous Aggregate Expenditures Increases by $100 Million,the Marginal Propensity to Consume

question 18

Essay

Autonomous aggregate expenditures increases by $100 million,the marginal propensity to consume is 0.60,marginal propensity to invest is 0.20,and the marginal propensity to import is 0.10.Calculate the change in income.

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Definitions:

Two-tail Test

A statistical hypothesis test in which the critical area of a distribution is two-sided and tests whether a sample is greater or less than a range of values.

Sample Variances

Statistical measurements that quantify the dispersion or spread of data points within a sample from their mean.

F Test

A statistical test used to compare the variances of two populations and determine if they are significantly different from each other.

Significance Level

A threshold within hypothesis testing that defines the probability of rejecting the null hypothesis when it is actually true, denoted by alpha.