If Investment Becomes More Sensitive to Changes in the Interest

question 7

Multiple Choice

If investment becomes more sensitive to changes in the interest rate, then

• A)the size of the fiscal policy multiplier will decrease
• B)the size of the fiscal policy multiplier will increase
• C)the size of the monetary policy multiplier will decrease
• D)the size of the monetary policy multiplier will increase
• E)both A and D

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Definitions:

Type II Error

The error that occurs when a statistical test fails to reject a false null hypothesis.

Level Of Significance

The chance of mistakenly denying the null hypothesis in a statistical examination when in fact it is accurate.

Probability

A measure of the likelihood that an event will occur.

Final Examination

A comprehensive test given at the end of a course to assess a student's understanding and grasp of the subject matter.