If an Instrument Measures Consistently but Does Not Measure What

question 3

Multiple Choice

If an instrument measures consistently but does not measure what it was designed to measure, the instrument is:

• A)valid but not reliable.
• B)reliable but not valid.
• C)standardized but not reliable.
• D)reliable but not normative.

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Definitions:

Interest Rate

The cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal amount annually.

Equilibrium Rate

The price or level at which supply and demand in a particular market are equal.

Usury Law

Legislation designed to regulate interest rates by setting a maximum rate that can be charged on loans and credit.

Interest Rate

The cost of borrowing money, expressed as a percentage of the amount loaned, which lenders charge borrowers or the rate earned by depositors.