If Aggregate Planned Expenditure Is Less Than Real GDP

question 384

Multiple Choice

If aggregate planned expenditure is less than real GDP

• A) real GDP will increase.
• B) real GDP remain unchanged.
• C) real GDP will either decrease or increase, depending on the MPC.
• D) inventories will increase above their target level and real GDP will decrease.

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Definitions:

Sum of Squares for Regression

The sum of squares for regression quantifies the variation explained by the regression model, comparing the fitted values against the mean of the dependent variable.

SSR

Stands for Sum of Squares due to Regression, which measures the variation explained by the regression line in the context of statistical analysis.

Simple Linear Regression

A statistical method for examining the linear relationship between two quantitative variables; one variable is used to predict the outcome of another.

Probabilistic Model Equation

A mathematical representation of a statistical model that incorporates randomness and accounts for the probability of various outcomes.