How Would the Equilibrium Interest Rate Respond to a Change

question 117

Multiple Choice

How would the equilibrium interest rate respond to a change from an income tax to a consumption tax?

• A)The equilibrium interest rate would rise.
• B)The equilibrium interest rate would fall.
• C)The equilibrium interest rate would be unaffected.
• D)The equilibrium interest rate may rise or fall based on whether the demand or supply of loanable funds changes.
• E)The equilibrium interest rate would rise while the quantity of funds lent rises.

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Definitions:

Null Hypothesis

A hypothesis that assumes no significant difference or effect, serving as a default assumption to be tested against experimental data.

Wilcoxon Signed Rank Test

A non-parametric statistical hypothesis test used to compare two related samples, matched samples, or repeated measurements on a single sample to assess whether their population mean ranks differ.

Test Statistic

In hypothesis testing, the test statistic is a standardized value derived from sample data, used to make a decision about the null hypothesis.

SPSS Output

The results generated by the Statistical Package for the Social Sciences, including statistical tests, tables, and graphs, after data analysis.