One way of testing the hypothesis that high welfare state spending
caused slow economic growth in European countries in the 1970s would be to:
a. use average total welfare spending in each country in the 1970s as the independent variable and average GDP growth rates as the dependent variable.
b. use average GDP growth rates in the 1970s as the independent variable and average welfare spending as a percentage of GDP as the dependent variable.
c. use average GDP growth rates in the 1970s as the independent variable and total welfare spending in each country as the dependent variable.
d. use average welfare spending in the 1970s as a percentage of GDP as the independent variable and average GDP growth rates as the dependent variable.
Answer: d
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