If the Income-Expenditure Multiplier Equals 4, and a 1 Percent

question 85

Multiple Choice

If the income-expenditure multiplier equals 4, and a 1 percent increase in the real interest rate reduces autonomous spending by 100 units, then a 1,000 unit recessionary gap can be eliminated by ________ the real interest rate by ________ percent.

• A)increasing; 10.0
• B)increasing; 4.0
• C)increasing; 2.5
• D)decreasing; 2.5

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Definitions:

Job Analysis

The act of researching and accumulating details regarding the tasks, duties, essential skills, expected results, and the occupational setting of a specific position.

Work Sample Test

A pre-employment assessment tool that requires applicants to perform tasks or work activities that mirror those they would encounter in the job.

Selection Decision

The process of choosing the most suitable candidate for a job position based on evaluation and assessment.

Predictive Validity

The extent to which applicants’ test scores match criterion data obtained from those applicants/employees after they have been on the job for an indefinite period