In the Classical Model, What Happens to the Level of Real

question 92

Multiple Choice

In the classical model, what happens to the level of real GDP if aggregate demand increases?

• A) Real GDP increases.
• B) Real GDP decreases.
• C) Real GDP would increase at first, then decrease.
• D) Real GDP would remain the same, at equilibrium.

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Definitions:

Critical Value of F

The threshold value determined from an F-distribution, given a certain significance level, used in analysis of variance (ANOVA) to decide whether to reject the null hypothesis of equal variances.

Predictor Variables

Variables in a statistical model that are used to predict or explain changes in the response variable.

Value

Refers to the importance, worth, or usefulness of something, often determined by its desirability, utility, or contribution to achieving a goal.

Multiple Regression Model

A statistical technique that uses multiple independent variables to forecast the outcome and determine the effect of each variable on the dependent variable.