If M^d = 2,600 - 200r,the MPC =

question 9

Multiple Choice

If M^d = 2,600 - 200r,the MPC = .75,G=100,and T = 100.If the central bank wants the interest rate to be r=2,then the money supply must be

• A)5.
• B)400
• C)300
• D)3,000
• E)not enough information was given.

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Definitions:

Predictive Validity

The extent to which a score or measure can predict the future performance or behavior of subjects.

Content Validity

The extent to which a test samples the behavior that is of interest.

Reliability

The extent to which a test yields consistent results, as assessed by the consistency of scores on two halves of the test, or on retesting.

Mental Age

A measure of an individual's cognitive ability compared to the average cognitive ability for their chronological age.