When a Person's Test Performance Can Be Compared with That

question 54

Multiple Choice

When a person's test performance can be compared with that of a representative and pretested sample of people,the test is said to be

• A) reliable.
• B) standardized.
• C) valid.
• D) normally distributed.

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Definitions:

Rational Expectations

An economic theory which proposes that individuals make decisions based on their rational outlook, available information, and past experiences.

Ascribing Rationality

The assumption that individuals make decisions based on rational thought processes, maximizing utility based on available information.

Velocity of Circulation

The rate at which money is exchanged in an economy, reflecting the frequency with which money is spent on goods and services.

Rational Expectations Theory

The hypothesis that individuals form forecasts about the future based on all available information, including the understanding of economic policies, thus acting optimally on these expectations.