Assume Autonomous Net Taxes Fall by $300; the MPC =

question 38

Multiple Choice

Assume autonomous net taxes fall by $300; the MPC = 2/3.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.As a result,saving will initially

• A)fall by $100
• B)rise by $100
• C)fall by $300
• D)remain unchanged
• E)be indeterminate

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Definitions:

Regression Models

Statistical models used to estimate the relationships among variables, often used to predict a dependent variable based on one or more independent variables.

Collinearity

A statistical phenomenon in which two or more predictor variables in a multiple regression model are highly correlated, potentially leading to unreliable estimates of the coefficients.

Intercorrelation

A statistical correlation between two or more variables or sets of data.

Simple Regression Analysis

Simple Regression Analysis is a statistical technique for estimating the relationship between a dependent variable and a single independent variable.