If the MPC Is 0

question 15

Multiple Choice

If the MPC is 0.5, and the government cuts spending by $400b, the overall effect on GDP will be:

• A) a decrease of $400b.
• B) an increase of $400b.
• C) a decrease of $800b.
• D) an increase of $800b.

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Definitions:

µ = 15

Represents the mean of a population is equal to 15.

Z-statistic

A measure used in statistics to quantify the deviation of a data point or a group of data points from the mean, expressed in terms of standard deviations.

Two-tailed Test

A statistical test that allows for the exploration of relationships in both directions, enabling the detection of significant differences regardless of the direction.

Significant

Pertaining to results in statistical analysis, significant means the findings are unlikely to have occurred by chance and indicate a real effect or relationship.