If Planned Aggregate Expenditure in an Economy Can Be Written

question 28

Multiple Choice

If planned aggregate expenditure in an economy can be written as: PAE = 5,000 + 0.6Y,what is the income-expenditure multiplier in this economy?

• A) 0.2.
• B) 0.8.
• C) 2.5.
• D) 4.0.
• E) 5.0.

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Definitions:

Regression Line

A line plotted through the scatter plot of data points that best expresses the relationship between those points, typically used in linear regression.

Coefficient Of Correlation

A numerical measure that indicates the strength and direction of a linear relationship between two variables.

Confidence Interval Estimate

A range of values, derived from sample data, that is likely to contain the value of an unknown population parameter, with a specified level of confidence.

Prediction Interval

A type of interval estimate of a predicted value of a variable based on a particular set of data, encompassing the uncertainty of the prediction.