The Argument That an Increase in Government Expenditures Will Have

question 228

Multiple Choice

The argument that an increase in government expenditures will have a larger impact on aggregate demand than tax cuts is based on the idea that

• A)tax cuts have no multiplier affect.
• B)people will save part of a tax cut.
• C)an increase in consumption expenditures has a smaller effect on real GDP than an equal increase in government expenditures.
• D)None of the above is correct.

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Definitions:

Sample Coefficient

A statistical measure calculated from a sample of data, used to estimate the characteristics or parameters of a population.

Least Squares Regression

A method to estimate the coefficients of a regression line by minimizing the sum of the squares of the differences between observed and predicted values.

Coefficient of Determination

A statistical measure that determines the proportion of variance in the dependent variable predictable from the independent variable(s).

Coefficient of Correlation

This is a statistical measure that calculates the strength and direction of the relationship between two continuous variables.