Figure 17-8

question 351

Multiple Choice

Figure 17-8. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the right-hand diagram, "Inf Rate" means "Inflation Rate."

-Refer to Figure 17-8. Subsequent to the shift of the Phillips curve from PC₁ to PC₂, the curve will soon shift back to PC₁ if people perceive the

• A) increase in the inflation rate as a temporary aberration.
• B) economic boom as a temporary aberration.
• C) increase in the inflation rate as a sign of a new era of higher inflation.
• D) economic boom as a sign of a new era of higher economic growth.

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Definitions:

Predictive Validity

The extent to which a test or measure accurately predicts future outcomes or behaviors.

Empirical Approach

A method of inquiry that relies on observation, experimentation, and evidence rather than theory alone.

Test Validation

The process of ensuring that a test accurately measures what it is intended to measure.

Content Validity

Refers to the extent to which a test measures all aspects of a given construct or domain of interest accurately.