If Planned Aggregate Expenditure (PAE)in an Economy Equals 2,000

question 163

Multiple Choice

If planned aggregate expenditure (PAE) in an economy equals 2,000 + 0.6Y and potential output (Y*) equals 4,900,taxes must be increased by ________ (rounded to the nearest whole number) to eliminate any output gap.

• A) 67
• B) 200
• C) 225
• D) 250
• E) 1,000

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Definitions:

Stepwise Regression

An approach to regression analysis where the selection of variables for prediction is done automatically.

F-statistic

A value used in ANOVA tests to determine if the variances between means of different groups are significantly different.

P-value

A measure in statistics that helps determine the significance of results, indicating the probability of observing the given result by chance if the null hypothesis is true.

F-to-enter

A criterion used in multiple regression analysis to decide at which level a new variable should be included in the model.