Consider a Closed-Economy AD/AS Model

question 87

Multiple Choice

Consider a closed-economy AD/AS model.If an increase in the government's budget deficit drives up market interest rates,

• A)credit will become less expensive.
• B)nothing - government borrowing cannot push up interest rates.
• C)private expenditure will likely increase.
• D)some private investment expenditure will probably be crowded out.
• E)the money supply will increase.

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Definitions:

Face Validity

The extent to which a test is subjectively viewed as covering the concept it purports to measure, often assessed through its appearance to non-experts.

Predictive Validity

The extent to which a score on a test or measurement accurately predicts future performance on a related task or behavior.

Concurrent Validity

The degree to which the results of a particular test or measurement correspond to those of a previously established measurement for the same construct.

Content Validity

The extent to which a test measures all aspects of the concept or construct it intends to assess, ensuring that the test is fully representative.