Assume the Marginal Propensity to Consume Is 0

question 79

Multiple Choice

Assume the marginal propensity to consume is 0.8. If consumer spending increases by $20 billion, then real GDP will:

• A) Increase by $100 billion
• B) Decrease by $100 billion
• C) Increase by $16 billion
• D) Will not change

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Definitions:

Population Variances

Population variances measure the degree to which individuals within a population differ from the population mean, indicating the distribution's spread.

T-tests

A type of inferential statistic used to determine if there is a significant difference between the means of two groups, which may be related in certain features.

Sum Squares Treatments (SST)

A measure used in the analysis of variance (ANOVA), representing the sum of squared differences between the treatment means and the overall mean.

Sum Squares Error (SSE)

This term corresponds to the sum of the squared differences between the observed and predicted values, used in statistical models to measure the amount of error.