Figure 8-1

Based on the scatter diagram in Figure 8-1, approximately how much will consumption increase after a permanent tax cut of $400 billion?
A) $100 billion
B) $150 billion
C) $250 billion
D) $350 billion

Question

Figure 8-1

Based on the scatter diagram in Figure 8-1, approximately how much will consumption increase after a permanent tax cut of $400 billion?
A) $100 billion 
B) $150 billion 
C) $250 billion 
D) $350 billion

Quizplus · Accepted Answer

Based on the scatter diagram, it appears that a $400 billion tax cut would result in approximately a $250 billion increase in consumption, as shown by the upward shift in the regression line.

Figure 8-1 Based on the Scatter Diagram in Figure 8-1, Approximately How