Suppose the Federal Government Buys $10 Million Worth of Automobiles

question 74

Multiple Choice

Suppose the federal government buys $10 million worth of automobiles.If the MPC is 0.80,what will be the impact on aggregate demand,other things being equal?

• A)Aggregate demand will increase $8 million.
• B)Aggregate demand will increase $10 million.
• C)Aggregate demand will increase $12.5 million.
• D)Aggregate demand will increase $50 million.

Analyze financial options to maximize economic benefits.

Calculate equivalent periodic interest rates for different compounding intervals.

Understand the concept of compound interest and its application in calculating future and present values of investments.

Calculate the future value of different types of investments, including lump sum investments, annuities, and monthly contributions.

---

Definitions:

Sum Of Squares For Error

The sum of squared differences between observed and predicted values in a regression model, measuring the discrepancy between the data and the model.

T-Test

An analysis technique designed to evaluate whether the mean values of two distinct groups differ significantly.

Linearly Related

Describes a relationship between two variables where a change in one variable is associated with a proportional change in the other.

Coefficient Of Determination

A statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable or variables in a regression model.