Suppose That the Consumption Function Crosses the 45-Degree Line at a Disposable

question 7

True/False

Suppose that the consumption function crosses the 45-degree line at a disposable income level of $800.Assume further that saving equals $200 when disposable income is $1, 300.This implies that the MPC must equal 0.6.

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Definitions:

Test Statistic

A numerical value derived from an experiment's data, utilized in hypothesis testing to decide if the null hypothesis should be dismissed.

T Value

A ratio that is derived from the standardized difference between two sample means in a t-test, used to determine the statistical significance of the difference.

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Test Statistic

A calculated value used in statistical hypothesis testing to compare against a critical value to decide whether to reject the null hypothesis.