Which of the Following Is Characteristic of Aggregate Demand in Canada

question 101

Multiple Choice

Which of the following is characteristic of aggregate demand in Canada?

• A)The exchange-rate effect is relatively small because exports and imports are a small part of real GDP.
• B)The interest-rate effect is relatively small because investment spending is not very responsive to interest rate changes.
• C)The wealth effect is relatively large because money holdings are a significant portion of most households' wealth.
• D)The interest rate effect is relatively large.

---

Definitions:

Independent Variables

Independent variables are variables in a study or experiment that are manipulated or categorized to observe their effect on dependent variables, without being affected by other variables in the study.

Collinearity

Collinearity is a condition in statistical modeling where two or more predictor variables are closely linearly related, potentially affecting the model's estimates and interpretations.

F-test

A statistical test used to compare the variances of two populations to assess the equality of their means.

Multicollinearity

A statistical phenomenon in which multiple independent variables in a regression model are highly correlated, potentially undermining the statistical validity of the model.