Which Statement Pertains to the Condition of Crowding Out

question 85

Multiple Choice

Which statement pertains to the condition of crowding out?

• A) Government cuts spending by $300 million,resulting in a decrease in consumption by $500 million.
• B) Government cuts taxes,resulting in an increase in investment spending by $270 million.
• C) Government increases spending by $300 million on new highway construction,resulting in an increase in consumption by $500 million.
• D) Government raises taxes by $300 million to finance new spending on highway construction,resulting in a decrease in investment spending by $270 million.

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Definitions:

Observations

Data points or items recorded during an experiment or research study.

Determination

The firmness of purpose or the process of establishing something exactly by calculation or research.

Goodness Of Fit

A statistical analysis to determine how well sample data fit a distribution from a population with a normal distribution.

Regression Equation

The equation that describes how the mean or expected value of the dependent variable is related to the independent variable; in simple linear regression, E(y) = b0 + b1x.