Scenario 11-1 The Information Below Is Relevant to the Following Question(s)

question 24

Multiple Choice

Scenario 11-1
The information below is relevant to the following question(s) .
Assume IBM decides,despite an ongoing recession,to build a new branch for computer analysis in Bozeman,Montana.The plant expects to spend $12 million to hire the necessary employees,all of whom move in from out of state to take the jobs.
-Refer to Scenario 11-1.If Bozeman citizens decided to spend more than 3/4 of the additional income,

• A)the MPC would decrease.
• B)the expenditure multiplier would decrease.
• C)the expansion in income would be larger.
• D)aggregate expenditures would decline.

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Definitions:

P-value

The probability of observing the tested result, or one more extreme, if the null hypothesis is true.

α

Typically represents the level of significance in hypothesis testing, indicating the probability of rejecting the null hypothesis when it is true.

Type I Error

The statistical mistake of rejecting a null hypothesis when it is actually true, also known as a "false positive".

Type II Error

The error that occurs when the null hypothesis is falsely not rejected, missing the detection of an actual effect.