What Will Be the Impact on AD and Budget Deficit

question 68

Multiple Choice

What will be the impact on AD and budget deficit if there is initially a federal budget deficit,and government purchases and transfer payments both rise?

• A)AD increases and the budget deficit decreases.
• B)AD decreases and the budget deficit decreases.
• C)AD decreases and the budget deficit increases.
• D)AD increases and the budget deficit increases.

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Definitions:

Regression Line

A straight line that best represents the data on a scatter plot, showing the relationship between the independent and dependent variables.

Residuals

The differences between observed values and the values predicted by a model.

Confidence Interval

An aggregate of values, concluded from statistical review of samples, assumed to likely house the unknowable value of a population parameter.

Prediction Interval

A range of values that is likely to include the value of an unknown parameter for a future observation with a specified probability.